A US-style tax credit for affordable housing should be introduced alongside private money for the rented sector, an influential American economist has said.
The government is already looking at private money via real estate investment trusts but David Smith, head of the Institute of Affordable Housing in Boston, said credits were needed to subsidise the REITs if they are to deliver affordable housing.

He says REITs need subsidy to create low-rent housing, so that returns to private investors remain attractive (HT 23 January, page 18).

Under the credits, called housing and regeneration tax credits, developers could take every pound spent on social housing off their corporate tax bill. “There are other forms of subsidy, but [these] credits are delivery-focused,” said Smith.

An ODPM spokesman said it was uncertain whether the proposals would feature in the Barker review.