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Boris backs pension funds to build rental homes

Mayor of London, Boris Johnson gave backing for large scale institutional investment into rented housing today at a conference in Croydon.

Launching his London Housing Design Guide, a consultation on what types of design standards should be required in housing, Johnson approached the more pressing matter of how new homes would be paid for.

He began his speech by offering support for the private rented sector rental initiative launched in May by the Homes and Communities Agency, the government’s ‘super quango’ charged with rebuilding Britain.

It followed intense lobbying from the British Property Federation (BPF). The BPF has long stated that an enhanced and professionalised home rental market, mirroring the American or European models, would allay many of the problems currently experienced in the UK. Better renting would avoid people getting into debt by buying homes they could not afford, and it would also push rogue landlords out of the market.

The HCA launched an expressions of interest encourage parties interested in building rental developments to come forward. The moves could see pension and life funds investing in long term rental projects.

The BPF has been calling on the Treasury to amend stamp duty anomalies that penalise the bulk purchasers of homes. Changes widely expected in the Budget never materialized, much to the frustration of the sector.

Johnson told the audience he was “keen to attract institutional investment into rented housing in London”, was supportive of the HCA PRSI and “willing to have a simillar conversation in London about making this happen.” He said he would explore what guarantees the institutions would seek and mentioned “potentially putting in GLA owned land.”

The mayor also mooted the possibility of marrying up institutions with the owners of land who have 195,000 consents across London.

Ian Fletcher, director of residential policy, said:

“There is a great opportunity for London to lead the way in showing how a professional rented sector can benefit the housing market. London is the most unaffordable place to buy the UK and a commitment from the mayor to work with institutions on developing the HCA’s proposals is warmly welcomed. With public finances likely to be severely squeezed in the coming years, it is absolutely vital that we do whatever we can to secure institutional investment and fully maximize the role of private rented housing.”

Contact: Andrew Teacher / 07968 124545 / ateacher@bpf.org.uk