The only solution to the UK’s housing crisis is to encourage institutional investors, such as pension funds, to build-to-let.
That is the message from the British Property Federation delivered to an influential committee of MPs on the same day the Government published its housing strategy.
Speaking at a CLG Select Committee evidence session into financing new housing supply, the BPF stated that institutional investors were already interested in housing and coupled with political support and increased demand for rental properties, they could help meet the UK’s housing need.
The new housing strategy supports institutions building homes to rent through the release of land for sites and announcing an independent review of the sector in the New Year. Giving evidence, the BPF welcomed these changes but urged further initiatives.
Ian Fletcher, director of policy at the BPF, said: “While many of the conditions are already in place, such as rental demand and now political support, the Government faces the challenge of firstly finding sufficient scale of opportunity, and also trying to encourage institutions which are unfamiliar with the housing sector to invest.
“Releasing public sector land could help solve the issue of scale. The vast majority of public land is held by local authorities, and there needs to be greater clarity on its release. Negotiating often complex and long-term deals with local authorities can be difficult, and perhaps the HCA could be introduced as an honest broker in tricky negotiations.
“Another vehicle that could encourage institutional investors and boost housing supply is residential REITs. They’d provide an obvious entrance into the market and an exit strategy, but officials are being a bit over cautious, particularly around issues such as the ability of a REIT to trade. Further discussions are required with the Treasury.”
Article courtesy of Investor Today Sign up for Investor Today newsletter
Firstly it is worth pointing out that although prices will always fluctuate in real terms, i.e. when inflation is taken into account, and actual sale prices may fall in the short and medium term, over the longer term, say the lifetime of an average mortgage, they will always rise unless there is a fundamental step change in the way we live our lives. So in real terms, there are many differing opinions on what the future holds, varying from a gentle rise to a sharp fall and all points in-between. The truth is there are too many variables to know for sure, but looking at those variables can help us make a better guess.
Emily from Britain Loans