9:57 AM, 23rd November 2011, About 10 years ago
Build-to-let funded by private investors and pension funds is the solution to the UK’s housing crisis, housing lobbyists have told MPs.
Unlocking billions of private sector cash to invest in a house building programme together with the government’s new housing deal would meet the country’s growing need for homes, says the British Property Federation.
MPs sitting at the Communities and Local Government Department select committee were told that investors are interested in sinking cash in to housing projects – and that this could link with proposals in the housing deal to make public land available to developers.
Ian Fletcher, director of policy at the BPF, told the committee: “While many of the conditions are already in place, such as rental demand and now political support, the government face 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.
Meanwhile, Bank of England interest rate setter David Miles wants fewer home owners and more renters to increase labour mobility. He believes the housing deal refloating the housing market gives property an undue importance in the economy.
He told an audience at York that the economy would improve with people moving for jobs rather than having their finances tied up in property.
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