Pension funds could kick-start house building

A three-fold increase in new homes could be built in the UK every year on the back of local authority pensions funding, according to a report released today (Friday 26 October) by the Future Homes Commission (FHC).

The RIBA-backed Future Homes Commission’s report Building the Homes and Communities Britain Needs calls for five major changes that will lead to 300,000 homes being built each year:

• The setting up of an independently managed £10bn Local Housing Development Fund, to kick-start the effort to build new mixed tenure communities. The fund would be financed by the largest local authority pension funds pooling 15% of their assets to invest in rental and shared-ownership housing. The fund would be owned by the contributing pension funds.

• A greater focus on design in all new homes, ensuring they meet current residents’ needs, making them fit for future generations, and thus attractive to UK and international institutional investors so that local authority pension funds can recycle their investment once a community has been established.

• A more consumer-oriented housing market, with reliable, comprehensive information available to people when making the most important financial decisions of their lives.

• A lead role for local councils, using the new powers now at their disposal to lead the creation of sustainable communities to meet local housing needs and ensure a decent return of their investments.

The report is published as new housing registration figures from NHBC have revealed a flat housing market across the UK. In total there were 28,151 new homes registered across all sectors for Q3 2012, compared to 30,039 in the previous year, representing a drop of 6%. Broken down, the private sector experienced a 7% decline, with social housing numbers down 5% against Q3 2011 figures.