Pension funds could finance new homes, report suggests

 
Rooftops of homes in Eastbourne The report suggests setting up a central fund of council pension fund assets

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A possible 100,000 to 300,000 homes could be built in the UK every year without using any government money, a study has claimed.

The Future Homes Commission, set up by the Royal Institute of British Architects, said council pension funds could be used to reach the target.

Some of the assets in local government pension schemes could be pooled to provide a £10bn housing fund, it said.

Housing Minister Mark Prisk said the ideas would be considered carefully.

He described the proposals as innovative and interesting.

'No better time'

The report said a housing revolution that would lead to economic growth and create tens of thousands of jobs was possible without increasing government debt.

Commission chairman Sir John Banham said local councils should lead new development.

"There is no better time to tackle the UK housing crisis," he said.

"After a year-long national inquiry, the Future Homes Commission has concluded a housing revolution is entirely possible and will lead economic growth.

He added: "We need to increase massively the number of quality homes being built for many years to come, but also to develop communities which enhance the quality of life for both new residents and those living in existing communities nearby. All this has to, and can, happen without any additional government funding.

"We strongly believe that local government can become the leader of new development once again, by using their assets and powers to create the type of mature, sustainable, mixed tenure communities that Britain needs and that institutional and international investors want to invest in."

Borrowing ability

The Local Housing Development Fund would be used to build quality homes that could be sold in the future to replenish the pot.

The study said the UK needed a threefold increase in the number of new homes to help end the "blight" of poor housing.

Councils have responded positively to the report but said the government must also ease restrictions on the ability of local authorities to borrow for house building.

The president of the Royal Institute of British Architects , Angela Brady, said the commission's recommendations "provide an excellent starting point for delivering a radically improved housing market".

 

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  • rate this
    +2

    Comment number 435.

    Good idea, especially if sweetened with a tax incentive. However I think part of the problem is there are too few houses in areas where people want to live, probably as suggested elsewhere move government departments away from London e.g. SIS, HO, DEFRA etc.

  • rate this
    +7

    Comment number 434.

    Quite frankly, if the Tories had re-invested the money they accumulated from selling off Council Houses, back into building more social housing (like they said they were going to do), then we would not have such a housing shortage now.

  • rate this
    +1

    Comment number 433.

    This is an AWFUL plan!

    If there's less houses being built today by private industry there's a reason for that, there's not enough demand. If there was, private enterprise would do it! It's simple stuff guys.

    All this does is build surplus homes with money taken from Taxpayers. This sounds just like USA trying to artificially create construction jobs = housing bubble & collapse!

  • rate this
    +1

    Comment number 432.

    build more houses with money that yet again is not there's and move dole and benefit people into and foreigners

  • rate this
    +1

    Comment number 431.

    @417.MCF
    Your comment doesn't really make sense because the pension fund idea is basically the same as what you are proposing the government should do, with the favourable exception that tax money wouldn't need to be spent. As regards penalising landlords that is just political red meat that does nothing to address the actually issue which is short supply and high demand.

  • rate this
    +1

    Comment number 430.

    Is it me but I thought the point of pension funds is something we save for future when we need it. . . not spend it now and have nothing. to be honest how many have one any way? I cant even afford a pension with all my taxes and bills going up each year. What a stupid stupid idea havent they done enough damage already to pension funds how about some compensation from the gambling Government!?

  • rate this
    +1

    Comment number 429.

    Yes, George Osborne should definitely invest his pension pot in this.

  • rate this
    0

    Comment number 428.

    Was not the whole mess of the state pension caused by plundering funds paid in in good faith for other projects?

    Council employees need to make sure that they are not defrauded in the same way that ALL citizens, particularly those who do not have an occupational pension, are already being cheated.

  • rate this
    -3

    Comment number 427.

    @ 419.AndyC555

    "Of course nurses 'deserve' a decent pension. But does a shop assistant 'deserve' to have to work till she's 75 so her taxes can pay for the nurse's pension?"

    Well said.

    Unforunately, if things don't change, the people of this generation will spend the rest of their lives paying for the promises the people of the last generation made to themselves.

  • rate this
    -1

    Comment number 426.

    #413. David H

    Come on.... explain to me why the solution has to be to build more houses.

    Caveat.... saying 'it will make someone a lot of money' is not an acceptable answer.

    If that is the only one you have, then i'd suggest some way of bottling and selling air should be the next venture you embark on..

  • rate this
    +5

    Comment number 425.

    Here's a few more numbers for you:

    MigrationWatch UK suggests that if the migrants granted amnesty were given access to healthcare and other benefits, the net cost to the exchequer would be £5.530 billion annually.

    Answer: STOP illegal immigration, and use those billions to build houses.

  • rate this
    +2

    Comment number 424.

    I just knew the pension pots would get abused somehow.

  • rate this
    +1

    Comment number 423.

    141. Denmark
    Please try not to resort to tired old cliches re. council staff - anything relevant to the debate and I'm sure people will be happy to read it.

  • rate this
    +6

    Comment number 422.

    Well perhaps there are just too many people in the country rather than too few houses?
    Anyone considered that??

  • rate this
    -3

    Comment number 421.

    Csae studies in Europe appear to show that this can work. The housing won't necessarily fit the bill of 'affordable housing' which the UK requires at the moment as the main incentive for the investment has to be maxmising and securing the return for the stakeholders. Although increased supply in the market will help to ease the demand pressure on prices across the board.

  • rate this
    0

    Comment number 420.

    We all know that all of this new housing will be out of reach for many people. I'm 35, work hard and pay my taxes, but because I choose not to have kids and remain single I'm just a piggy bank and not a "priority" over immigrants and pregnant teens, dole scroungers and drunks. I can't afford a deposit on a flat, because I have to pay extortionate rent. I'm looking at leaving the UK for good.

  • rate this
    -4

    Comment number 419.

    ".ish
    these Public Sector workers deserve their pensions"

    And in cloud-cuckoo land where the magic money tree grows, they will get them.

    In reality though, the numbers are there and you cannot refute them.

    Of course nurses 'deserve' a decent pension. But does a shop assistant 'deserve' to have to work till she's 75 so her taxes can pay for the nurse's pension?

    Something has to change

  • rate this
    -5

    Comment number 418.

    Public Sector involves ten times as much paper work, and eye watering death by power point presentations that teach "decision makers" how to tie their shoe laces and count their toes, these "ground breaking concepts" are then taken away for 18 months of procrastination.

    For every £3 invested I'll be surprised if half goes into the actual cost of building these "New Homes".

  • rate this
    +5

    Comment number 417.

    The biggest problem we have here is that the government is using every trick in the book bar the blindingly obvious in order not to penalise some wealthy private landlords and developers, who have made large sums of money out of this. Before all else, refurb the UKs existing empty properties. Use brownfield sites. Give local councils capital in order to build decent quality social housing.

  • rate this
    -7

    Comment number 416.

    Here's a few numbers for you. Currently there are around 10m people in the UK over 65. By 2050 that's expected to be 19m. That's 9m more state pensions to pay. NHS spending is on average 2x higher on the 65+.

    Anyone who thinks we don't need a huge change is mad.

    But everyone is selfishly pushing the problem on to our children and grandchildren.

    Boy, are they going to hate us.

 

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