A research produced by
Behind the political headlines dominated by Brexit developments, there has been a key shift with another highly contentious topic – housing. The rhetoric coming from the newly appointed ministers for housing and communities – and even the treasury – have indicated a clear shift away from the pre-election focus of financial support for first time buyers. The new ministers appear to finally accept that providing financial support to an increasing number of buyers is only serving to further inflate demand for the limited volume of new homes coming onto the market, while policies need to focus on addressing the supply, rather than demand side of the housing crisis. Crucially, there is an acceptance that funding should be allocated to all new schemes that can be delivered to meet a gap in the market, regardless of the tenure of ownership of the schemes being built. Although we await the exact details of the new policy in a housing white paper, which is likely to be released in conjunction with the Autumn budget on 23 November 2016, the change in direction away from home ownership is the first key step in unlocking a potentially vast amount of institutional capital into the Private Rented Sector (PRS).
Despite being the second largest real estate investment market in the world, the UK does not have an established private rented sector, which accounts for just 5% of the estimated total UK market.
Source : UBS AG
