PRS is vital for UK housing future
Katja Hall, CBI chief policy director, said the government must support the findings of the Montague Review as it strives to boost housing supply and kick start the UK economy.
One of the recommendations made by Sir Adrian Montague yesterday was to boost institutional investment into new developments for rent.
Hall said: “This review has rightly shone a light on the importance of the private rented sector, and the role it plays in ensuring a healthy housing market.
“Institutional investors must be encouraged into this market, and the Government should consider the range of recommendations to support this, for example unlocking former public sector land.”
Hall added that while support for new rental developments was critical the government must be careful not to ignore the need for more owner occupied and social housing.
She said: “We need to look at the whole picture, and that means getting spades in the ground for all types of housing.
“The Government must continue to explore every available option to boost the housing market, for example the NewBuy scheme, and use its balance sheet innovatively to unlock housing investment.”
Meanwhile the British Property Federation said with house building at a post war low despite increased demand and figures from the Office of National Statistics showing UK GDP held back by a weak construction industry, the recommendations in the Montague Review could unleash unprecedented investment in house building from pension funds, insurance companies and REITs.
Liz Peace, chief executive of the British Property Federation, said: “If we are to make headway in housing the nation and boost growth we must look at other ways of getting homes built.
“Encouraging institutions into building homes for rent has for some time been seen as the holy grail in enabling a long term private rented sector which is designed and built-to-let and offers renters something a bit different in the marketplace.
“Today is not the end of the journey, however, but the start of one. Myths about local authorities being forced to do this or that are just myths. Local councils and the communities they represent are in the box seat on this issue. If they want more housing to support their sons and daughters and grandchildren then an institutional private rented sector is an option they should consider.”
Richard Lambert, chief executive at the National Landlords Association, also threw his weight behing the proposals.
He said: “At present we are simply not building enough new homes to meet the demand. The genuine interest from institutional investors in building to rent is the fastest way to make a significant impact on the shortage of housing.
“Private renting currently accounts for almost 17% of all households in the UK; this is expected to rise to 27% by 2020. If the private-rented sector is to meet this demand, new investment initiatives will be essential, and will bring innovation and new thinking to the provision of rented homes.”