The just published CLG Select Committee’s report on Financing New Housing Supply has recommended a number of key measures across all tenures of housing in its analysis of the need to create an environment for additional financing on new housing supply.
I am absolutely delighted that in response to our oral and written evidence, the committee has concluded that “There may be some merit in introducing a version of the NewBuy Guarantee to underwrite investment” and that it recommends that the Government bring forward proposals to establish such a scheme.
It is our belief that the future of housing supply rests in the hands of institutional investors, including Local Authority pension funds. They are the only viable source of genuinely new financing for housing in a climate of continuing mortgage restraint.
However, investors are cautious by nature and need reassurance that housing can deliver their expected returns. A form of underwrite by the Government will have a major influence on investors’ willingness to support new housing models. As the Committee acknowledged, these new models are needed. It is recognised that once a new model has been successfully trialled investors will be much more willing to engage and the potential additionality for public policy – in employment, construction, regeneration and local businesses – could dramatically multiply the value of their perceived risk.