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Backing for Government Property Investment Review

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United Kingdom  finance  Real Estate Investment  IPD  Liz Peace  British Property Federation  BPF  Adrian Montague  London First  Infrastructure Investors 

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By - Tuesday 28 February 2012

Backing for Government Property Investment Review

The British Property Federation (BPF) has thrown its weight behind a recently announced government review that will examine the barriers for institutional investment in the private rented sector (PRS). Chief executive of the organisation Liz Peace described it as a "golden opportunity" for those working in the industry to highlight the advantages of real estate investment for institutions. She added it is important that those who contribute to the consultation also explain "what prevents the considerable interest in the sector turning into a greater flow of funds into it".

Sir Adrian Montague, who is on the board of firms such as Infrastructure Investors and London First, has been selected to head up the review. He has also previously acted as a private finance adviser to the Department of Transport, Environment and the Regions. The call for evidence was launched on February 21st, with Mr Montague setting out two questions he wants to answer with this review: "Will the changes the government has introduced go far enough to generate significant new flows of investment? And, if not, what can be done to accelerate things?"

The BPF cited figures from IPD, which revealed just GBP 4.5 billion is invested in the UK's housing by institutional investors each year, while the overall value of the PRS is estimated at GBP 840 billion. "Our country needs a lot more homes and there has probably never been a better time to make the case for building-to-let," Ms Peace commented. A report published by Savills earlier this month estimated the PRS will account for between 20 per cent and 23 per cent of the UK's housing stock by 2016. The firm explained buyers reliant on debt to fund property purchases have struggled to find funding since the onset of the global financial crisis, with equity-rich investors "currently leading the charge" in the PRS. However, the research stressed an increase in funding from institutional sources is "critical" if more rented housing is to be developed in the country.

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