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Written by rosalind renshaw

With collaborative politics the name of the game, a coalition of large landlords, lenders, property investors and surveyors has formed.

It is campaigning for more house building, with construction aimed at expanding the private rented sector.

The new Property Industry Alliance believes many people have given up all hope of being able to buy their homes.

One of those involved in the campaign, Andrew Stanford, head of residential at Cluttons, said: “It is clear that institutional investment in the PRS could be a key contributor to solving the UK housing crisis.”

The PIA wants the Government to alter the tax system to encourage large-scale housing development by institutions such as pension funds and insurance companies.
 
The new Alliance includes the RICS, CML, British Property Federation, British Council of Shopping Centres and British Council of Offices.
 
Liz Peace, chief executive of the British Property Federation, said: “The public are bored with countless political promises to fix our housing crisis, and while there is no silver bullet, it’s clear that we need to look at new avenues of finance.”
 
Mark Goodwin, director of external affairs at the RICS, said: “Action must be focused on ensuring that renting becomes a tenure of choice rather than a poor substitute for owning a home. A combination of increased investment and effective regulation can help show that the private rented sector can offer a realistic alternative to owner occupation.”

Comments

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    It s strange that no one talks about distribution costs in Commercial Real Estate, i.e Agencies and Broker fees which weigh from 5 to 15% in rental operations ; any investor would look carefully trough this huge impact on his ROI and rentability, so on Financing costs.

    We think that on the small and medium sized properties, Landlords and tenants could save on the third party costs and deal directly.
    Of course, Landlords and Tenants may need advice, studies, specific project and so should go trough Agents but why do we feel that there is no alternative on the market ?

    Ok, some direct listings are fakes, not updated etc… but there should be a place for people knowing what they are doing in Commercial Properties.

    At www.offees.com we list direct from Landlords for 0% fees.
    Individuals post their listing for free, Institutional landlords, investors can promote from 50 $ / ad / month for multiple listings.

    • 02 August 2012 13:44 PM
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    Getting the big institutions and big property firms into the private rented residential sector will need the government to grant some tax concessions.

    You see the trouble is that the big players, unlike the small landlord, has to charge out their cost of going round and sorting out tenant issues, so they just cannot make PRS investment work for them financially, unless the government doles special tax breaks their way like having SDLT charged on units not on the whole building.
    However, they can get things done faster than the small landlord – i.e. build lots of houses.
    Small private landlords, despite having grown the private rented sector from 8% of all housing stock in 1988 to over 14% now, could not achieve the growth rate the government desires.

    Small landlords should be very worried and at www.LettingFocus.com we see all this as a huge threat to them.
    If lots of big institutions invest and small landlords exit, it will be a shame, for they have built the sector – and as Julie Rugg said in her report for the government, on the whole they have done a pretty good job and better than the few big landlords currently do.

    Small landlords may also soon be facing bigger capital gains demands too so it is double trouble!
    Of course, if buy to let mortgage finance was more freely available and if the lenders allowed landlords to issue longer tenancies (which many tenants would like and lots of landlords would too, just as long as they could still repossess in the event of non payment of rent) then maybe the small landlord could go on expanding the sector (including also building new houses) and private renting would be more secure and much more attractive to tenants too.
    But the government seems to have been persuaded that the future of the private rented sector is with big business. At LettingFocus, we like the term "The Tescoisation of Buy to Let" (not sure who coined the phrase, but it wasn’t me) to describe this process.

    • 14 May 2010 10:39 AM
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    Given that most measures indicate that 20 per cent of households will be privately renting by the end of this decade, it could be argued that renting is ALREADY a tenure of choice for many millions of people.

    The real silver bullet will be to persuade the Government and Joe Bloggs that home ownership is no longer a realistic aspiration for many people. The mathes does not add up.

    Yes, this means demands for private renting goes up and institutional investment should play a part in the expansion of the private-rented sector, just not to the detriment of the 1.2 million (or thereabouts) private landlords already doing their bit.

    • 14 May 2010 07:43 AM
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