Shortsighted ministers miss chance to boost supply of new homes
Published: 13 September, 2010
UK: The property industry has reacted with dismay after the Treasury last week ruled out giving any help to boost the UK’s supply of homes to rent.
The British Property Federation said Government had missed “a real opportunity” to support the fledgling professional private rented sector and in doing so ease the UK’s housing crisis, create new jobs and reduce the budget deficit.
It spoke out after HM Treasury responded to a consultation launched by the previous Government, ‘Investment in the Private Rented Sector’, intended to unlock new sources of capital for house building in the face of constrained bank lending and falling public spending.
However, despite calls from an alliance of industry bodies, the Treasury ruled out giving financial support to increase the delivery of homes to rent, claiming that institutional investment would remain a ‘niche’ part of the PRS.
The BPF had argued for cost effective measures to encourage institutions such as pension funds to invest in homes for rent, including the disaggregation of Stamp Duty Land Tax on the bulk purchase of homes.
The private rented sector has provided 1.1m additional households with a home since 2000, accounting for nearly all housing growth, but more are needed, with almost 5m people languishing on council waiting lists.
Commenting on today’s publication, Ian Fletcher, director of policy (real estate) at the British Property Federation, said: “This is a real missed opportunity, but the real losers from today’s announcement are not the property industry but the millions of people in the UK who just want somewhere to live.
“There is a huge hole in the Treasury’s logic – on the one hand arguing that any change to the SDLT regime would ‘carry a significant cost to the Exchequer’, but on the other hand that this is a ‘niche’ sector and that nothing would happen. They can’t argue it both ways!
“The good news is that private renting will have no shortage of demand, as people struggle to buy and the Government struggles to fund other housing provision. The bad news is that with a little bit of public spending Government could have leveraged in significant funding for housing from institutions.
“It is difficult to see what other sources of funding the Government is going to conjure up in the near future. We welcome the recognition, however, that expanding the REIT regime in the UK will be beneficial and is worth continuing to explore.”