2.61 Within B&NES and particularly in Bath “Build to Rent’’ schemes are becoming increasingly popular. These are schemes that provide solely rented accommodation. They are attractive to developers and investors as they generate significant long-term income. For occupiers they provide flexibility, through often short-term tenancy terms, and security of renting high quality accommodation usually from a management company. The rental levels charged are high, especially in Bath. In terms of affordable housing this is provided as an affordable rented tenure and Planning Practice Guidance states that 20% discount is generally regarded as a suitable benchmark for the level of affordable private rent homes to be provided. National affordable housing policy also requires a minimum rent discount of 20% for affordable private rent homes relative to local market rents. Whilst this helps make schemes attractive, a 20% discounted rent does not adequately meet affordable housing need within B&NES and especially Bath.
2.62 In order to support people that wish to purchase a home in their local area but are unable to afford a property on the open market the government is introducing ‘First Homes’, which will be made available at a 30% discount off market price. In order to make affordable provision in ‘Build to Rent’ schemes more affordable to those in need in B&NES it is proposed that market rents should be discounted by an equivalent 30%. This would be achieved by amending Policy CP9 as set out below. The financial and delivery implications of this policy change will need to be viability tested in preparing the Draft Plan. In addition, the specific circumstances of individual schemes would need to be taken into account in determining the rental discount level.
2.63 'Build to Rent’ properties are typically small and usually occupied by one or two people, sometimes from independent households. If they are occupied by three or more people from different households they are classed as Houses in Multiple Occupation (HMO) and may require a HMO licence and planning permission in Bath as an Article 4 direction in place. HMOs are an important part of the local housing market and purpose-built shared accommodation may help affordability for occupiers and address some of the issues relating to HMOs which are converted from family homes. There may be some benefits from allowing flexible uses of new purpose-built managed schemes to help address the existing HMO issues and development viability to support higher discount levels. This will be further explored in preparing the Draft Plan.
Consultation DM 17
Amendments to Policy CP9
Add ‘Build to Rent Scheme: Affordable units as part of a Build to Rent scheme should be discounted in line with First Homes, to a minimum of 30% which should be capped to a First Homes discounted sale equivalent, however, regard will be given to affordability on a site by site basis’.