John Lewis's move into property development includes plans to build 400 apartments above Waitrose in West Ealing
In his speech at the Conservative Party conference last week Housing Secretary Michael Gove outlined the government's plans to «build in city centers and on brownfield land» to «revitalize high streets» while protecting the green belt.
It follows Sir Keir Starmer's announcement that he would make it easier to build infrastructure for new housing and support «builders, not blockers».
Given the alarming shortage of homes in the UK, this is urgently needed. An average of 25 people are now asked to view every rental property in Britain, up from 20 people just five months ago, according to new data from Rightmove.
The John Lewis Partnership is trying to do its part. Like many retailers, we own significant and valuable real estate. Some of this could be used to build much-needed quality housing, especially in areas with well-located brownfield sites.
A housing supply crisis has been brewing for years, but soaring interest rates have made it worse. Landlords are selling out in droves. The end of Help to Buy has added to the pressure. Rents hit record levels.
Our estate gives us the opportunity to release derelict land to build homes for local communities. By renting this housing to people, especially the squeezed middle, we can help provide quality long-term rentals, including affordable housing.
People understandably ask why we want to build houses. John Lewis and Waitrose are proud to be retailers and that will always be our priority. We are nothing without our retail brands, and we don't take our customers for granted.
We see rental housing as a way to help improve local communities. This will create jobs and new public spaces, and local residents will be able to take advantage of the new Waitrose store.
We will bring the values and experience of partnership to provide excellent customer service when renting out a home. And this will benefit the Partnership by bringing in new sustainable income over the long term.
We have a small, close-knit and experienced team that is doing this together with the investment company abrdn. We will own and manage these houses ourselves.
And that is why our commitment to this new venture is unwavering, regardless of who is at the helm of the Partnership. Creating new long-term businesses is in our DNA and was always intended by our founder. John Spedan Lewis was the landlord and even provided accommodation for the partners of the John Lewis store.
We cannot solve the housing crisis alone — only collaboration between the public and private sectors can help solve this problem. But what we can do is play our part in making a positive impact by creating high quality rental housing that is sadly missing from much of the market.
Our plans will be financed from funds managed by brdn, which has been active in this area for many years. These are mainly long-term pension and insurance investments aimed at generating returns over many years, as is the case with infrastructure.
The long-term potential of purpose-built rental homes built to a high standard. means that institutional investors view it as an attractive investment.
Large investors such as Legal & General, M&G and Grainger have been in the rental market for years.
Meanwhile, other high-quality brands have emerged, also backed by pension fund money, in what is now called «build to rent»: Moda Living, Get Living and Quintain Living, to name a few. However, these firms provide just a 2% minority of the UK's 5.5 million rental homes.
It wasn't always like this. At the turn of the 20th century, most Britons rented and then most housing was owned by institutions. As post-war housing increased and regulations tightened, this changed in the second half of the century, but in the last decade pensions and insurance companies have returned to the housing sector.
A third of people in London, where our original sites are located, now rent, and although this figure falls to around one-fifth throughout England, the figure is rising rapidly, especially in towns and cities.
However, as rental housing is almost entirely driven by rental investment, there is no certainty about the level of quality or service that residents receive.
Some holiday rental landlords offer excellent services, but too often renting is seen as a rite of passage — something to be endured rather than enjoyed.
However, government statistics show that almost a quarter of all rental housing is “indecent”, meaning tenants suffer from damp, leaking or poorly modernized homes.
So what will be the difference with John Lewis?
For us, this means managing these homes responsibly for the long term, rather than selling them. This means putting our partners, as people at the John Lewis Partnership are known, at the heart of what we want to do.
This means providing as much affordable housing as possible and working with local charities and communities — as we do today — to support their causes and provide space for their activities.
As co-owners of our business, we take responsibility for its success.
As a partnership, we always think long term. And just as we strive to provide our retail customers with a high level of service based on trust, we believe it is only fair that the nation's renters can receive the same in their homes.
Nina Bhatia — Executive Director, Strategy and commercial development at John Lewis Partnership
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