Communities select committee says government must accelerate efforts to attract institutional investment into housing
The government must accelerate efforts to attract institutional investment into housing as part of a more concerted drive to tackle the housing crisis, MPs have said.
In a report published on Monday, the communities select committee called for the government to step up efforts to tackle the housing crisis and employ “a basket of measures”, covering all tenures of housing, to bring forward more housing finance.
The report set out four key areas for action which, taken together, “could go a long way to raising the finance needed to meet the housing shortfall”.
- Large-scale investment from institutions and pension funds;
- Changes to the financing of housing associations, including a new role for the historic grant on their balance sheets;
- Greater financial freedoms for local authorities;
- New and innovative models, including a massive expansion of self build housing
Clive Betts, MP (Lab), committee chair said: “For decades, successive governments have failed to deliver sufficient homes to meet demand.The country faces a significant housing shortfall, and the financial crisis has amplified the problem.
“There is no ‘silver bullet’. We have to muster all the resources we can. The government’s housing strategy has made a useful start and we hope many of its measures will provide a stimulus over the short to medium term.
“But we need more action if we are to see significant long term improvement in housing supply”.
Betts said large institutions and pension funds, which have only ever made a limited contribution to new housing, could provide a”substantial source of investment”.
“We should be looking to new forms of investment to help address the housing shortfall. Pension funds and large financial institutions have a blind spot when it comes to housing but could deliver a significant number of new homes for rent and achieve a steady return on their investments.
“Public sector bodies and housing associations must encourage such investment. The Government should also look to establish a housing investment bank, to channel investment into housing. Expanding the Green Investment Bank to cover housing would be one way of achieving this.”
The report also questioned the government’s flagship Affordable Rent model and highlighted concerns that it could make parts of London unaffordable for people on low income.
The report added that local authorities have an important role to play in boosting housing supply, but struggled to fulfil their potential because of “centrally-imposed constraints”.
“The Government should give councils greater freedom to decide on the best housing solutions for their areas. Local authorities must also be allowed, within prudential limits, to safely increase their capital borrowing for new housing,” Betts said.