Speaking at the Financial Conduct Authority’s mortgage conference in London yesterday Nigel Wilson said L&G and others such as BlackRock – which also has ambitions to invest heavily in UK housing stock – “have to deliver an institutional revolution in renting”.
He told delegates: “We need a vibrant private rented sector to ensure there is opportunity and choice for all age groups – renting has to become a perfectly acceptable lifestyle choice for a large swathe of society, especially if good quality, professionally serviced, affordable options become available.
“Let’s end the cottage industry of fragmented ownership of buy-to-let investors with insufficient interest in the need for high quality long-term investments. Renting will become a huge institutional market creating 20,000-30,000 new homes a year – that’s a £6bn market.”
Wilson also came down hard against further government intervention to stimulate demand for UK housing and said policy has wrongly focused on helping more people to buy homes without ensuring that more homes are built.
He said: “Almost every Chancellor of the Exchequer feels a strong attraction to creating housing policy. But they seem to ignore the long term supply and demand imbalance which stops younger people getting on the housing ladder while creating blockages at the other end where older people are trapped in over-sized inconvenient energy and lifestyle inefficient family homes.
“The government has been intervening in the housing market, but to date, largely on the demand side, which is the wrong side of the equation. It’s the supply side that really matters.”
Legal & General is one of several firms investing institutional and pension fund money into building new owner occupier, affordable and private rental accommodation across the UK.
To date the firm has 25,000 new homes in its building pipeline.