RIBA’s Future Homes Commission to call for local government pension funds to invest £10bn in homes for private rent
A wide-ranging report commissioned by the RIBA into the future of housing in the UK will call for local government pension funds to invest £10bn in homes for private rent.
Sir John Banham, chair of RIBA’s Future Homes Commission, said the report, to be launched in the next few weeks, will say there is potential for the 15 biggest council pension funds to put 15% of their assets into a fund, raising £10bn to invest in private rented housing, thereby stimulating the construction of new homes.
Banham, a former director general of the CBI and chair of Tarmac, said the report found there is up to £180bn of local government funding effectively held “in suspended animation”, a proportion of which could be used to fund housing.
Speaking at last week’s Housing Market Intelligence conference run by the Home Builders’ Federation, he said rental housing would provide pension funds with a return of more than 10% a year.
He said: “We will ask for local government pension funds to do what they should be doing already. To have these public assets held in suspended animation in the middle of one of the most severe economic crises in a generation is not right.
“They need to invest in developments that give them a return of better than 8%. This is a huge opportunity, the problem is they’re terrified of doing anything and at the moment there isn’t the product to invest in.”
Banham said the commission would also recommend housing construction rates be upped three-fold, and a much greater focus by housebuilders on design in order to prevent opposition to new development.
Riba convened the Future Homes Commission, consisting of Banham, former CLG permanent secretary Mavis McDonald, property consultant Kate Faulkner and ICA architecture chair Roger Graef, last year following on from branding UK new homes “shameful shoeboxes” that were on average 8% smaller than the recommended minimum size.
Banham said the Commission would also recommend housing construction rates be upped three-fold, and a much greater focus by housebuilders on design in order to prevent opposition to new development.
However, it seems the report is unlikely to be as critical of housing design as anticipated. Speaking at last week’s Labour Party conference, commissioner Kate Faulkner said: “Not all new homes were as bad as we thought they were. They’re not all boxes.”