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The Hill Group boss warns of latent defects in build-to-rent towers
The boss of house builder The Hill Group has warned of “a real risk” of latent defects in taller build-to-rent buildings.
The boss of house builder The Hill Group has warned of “a real risk” of latent defects in taller build-to-rent buildings #UKhousingAndy Hill, founder and chief executive of The Hill Group, said that collapsing contractors and tightening fire safety regulations pose a serious risk to build-to-rent schemes.
His comments feature in a report by Love to Rent, titled Showcasing Excellence in Build-to-Rent, which was shared first with Inside Housing Living.
Asked about the future of the build-to-rent sector, Mr Hill said: “Much build-to-rent delivery has been undertaken by smaller contractors without strong balance sheets, some of whom have since gone into administration.
“With fire safety regulation tightening, there is a real risk around latent defects on taller buildings once warranties expire.”
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He continued: “While we have confidence in our own delivery, we believe the sector needs stronger mechanisms such as project insurance to appropriately manage risk, as many contractors and even tier ones do not have the balance sheets to carry it long term.”
Mr Hill said that build-to-rent has been part of The Hill Group’s planning strategy since late 2022, particularly for large, dense urban regeneration schemes.
He said: “I would like to say it was a planned strategy, but in truth we fell into it by retaining apartment stock that couldn’t be sold at acceptable prices at the time. We let the homes while waiting for market conditions to improve.”
Market softness following the Covid-19 pandemic, combined with the introduction of the Building Safety Regulator, led to repeated planning amendments and increased home numbers to maintain viability. This left the house builder with more stock to sell in a “declining market”.
This, in turn, accelerated Hill’s move towards forward-funded build-to-rent.
While the house builder has no immediate plans to launch its own fund, it “remains under consideration” given the scale and quality of its pipeline through to 2026.
As schemes grow larger and government pushes for faster delivery of housing, build-to-rent has a “strong future”, Mr Hill said.
He added that private landlords are being increasingly replaced by institutional investors as tax efficiency declines.
As well as urban multi-family schemes, there is growing demand for single-family homes in new towns and beyond.
Love to Rent’s report featured insights from several other build-to-rent leaders around professionalisation and best practice.
Anna Hwang, chief investment officer at build-to-rent landlord Placefirst, said that the ambitions of the government’s Renters’ Rights Act 2025, due to come into force on 1 May, “align closely” with the fundamentals of the single-family suburban homes model.
These include security of tenure, transparency, consistent quality standards and amenities.
Operators with these principles are well placed to adapt to the regulations as they evolve and as the expectations of renters continue to rise.
The report also discussed the challenge of capacity in developing more build-to-rent homes. It noted that more than 250,000 extra construction workers will be needed by 2028 to meet the current demand for construction, let alone any increased demand.
In response, the National House Building Council has pledged to invest £100m in training 3,000 new apprentices every year.
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