2nd
Aug 2015
For once we have the deputy mayor of London involving himself in the private rented sector by telling would be buy to let investors to help increase housebuilds in the capital, but don't bother with becoming landlords.
Richard Blakeway, the deputy mayor, has special responsibility for housing and is telling potential landlords to involve themselves only with investments, such as Real Investment Trusts.
He believes it is in the better interests of London's housing that new investors should not be “cannibalising existing stock” by snapping up existing homes to let out.
Blakeway wrote in City AM and said: “Why not invest through a vehicle – such as a Real Estate Investment Trust or a similar fund – rather than take on the hassle of being a landlord? ... It would offer flexibility, liquidity, and diversify risk away from the price of a specific home. ... In the long term, these vehicles could support the increased supply of homes, in contrast to the current fears that landlord activity may be inflating prices.”
He went onto explain that the REITs are regarded in the mainstay, as investing in commercial properties and said they are very suited to the ‘pension freedom’ investors.
He concluded: “While there is no doubt that [current forms of] buy to let has supported many new build housing schemes, around two thirds of its growth has come from the secondary market. The mayor and governments have explored how the rental market could contribute more to net new supply, rather than cannibalising existing stock, with a purpose-built-for-rent offer emerging in London.
“This is essential for a city seeking to double housing supply.
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