Big institutions: property developments to boost rental market
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With savings and pension funds depleted by the recent economic turmoil, pensioners are looking for other ways to supplement their pension and many are using their house as a way of generating cash. More...
Solving the housing crisis
Tuesday, 05 Feb 2008 12:48
A US-style professional rented sector to the UK could help the millions who cannot afford a mortgage or property, it is claimed.
Key players in the UK housing industry are in discussions today about the scheme which aims to meet the soaring demand for rental homes.
Currently, demand for rented accommodation is 25 per cent higher than for ownership thanks to soaring property prices, the difficulty in entering the mortgage and property markets and high numbers of repossessions.
Today's debate will form part of the British Property Federation's (BPF) residential conference where the organisation was due to set out the advantages of a professional rented sector similar to those run in the United States and Germany.
The scheme would involve large property managers running domestic lets in the same way as offices are run. It would mean tenants could benefit from longer-term lets and greater confidence and would involve big institutions investing in large-scale developments to rent.
The government, charities and private sector have already been looking at ways to boost housing options for people who cannot afford to buy their own property. But problems such as housebuilders failing to maintain output, have created hurdles to finding a solution.
Among those supporting the initiative is housing charity Shelter.
Shelter chief executive Adam Sampson said: "With affordability still such a huge barrier to ownership, we need the government to investigate new ways to increase overall housing supply and develop a fit-for-purpose private rented sector.
"Greater investment by institutions could increase security of tenure and ensure a professional rented sector provides a stable and decent housing option."
Meanwhile, Rupert Dickinson chairman of the BPF's residential committee said institutions could provide the long-term tenancies and levels of service that tenants abroad currently benefit from.