The British Property Federation has broadly welcomed the measures announced by the Chancellor in today’s budget.
Commenting on the fivefold government funding increase to kick start build-to-rent schemes where the Â£200m made available in December's Autumn Statement will be expanded to Â£1bn so providing equity or loan finance to support development stage finance Ian Fletcher, director of policy at the British Property Federation, said: "It's encouraging the Government’s confidence in build to rent has been reciprocated and we are delighted to see that the equity funding was heavily oversubscribed. Working in partnership with Government the sector should deliver an exciting and quality array of homes for renters."
On the Chancellor's announcement that from April 2013 the Government will extend First Buy to all those who aspire to own a new build home and create a mortgage guarantee for lenders who offer mortgages to people with a deposit of between 5 and 20 per cent Ian Fletcher, said: "This is a strong package of help for housing. Annual transactions are half what they were and that has a knock on consequences for all those parts of the economy that rely on people moving. Helping people needing a deposit has for some time been cited as the missing piece of a coherent housing policy and both is therefore welcome."
The Federation also welcomed the announcement in today's Budget that the Government is to consider the case for REITs being included within the definition of “institutional investor”, with Peter Cosmetatos, director of finance at the British Property Federation, saying:
“The announcement of an informal consultation on the potential inclusion of REITs in the “institutional investor” definition is very welcome, as this is something we have been asking for. If the Government can be persuaded to make this change, it will ensure that the UK REIT sector can get the greatest value from the “institutional investor” relaxation of the diverse ownership rule last year and the “REITs investing in REITs” rule change being made this year.
“Allowing REITs to be considered as ‘institutional investors’ will allow REITs to hold significant interests in other REITs, and use the REIT wrapper as a vehicle for attracting capital into joint venture arrangements.”
The Federation is also pleased at the government commitment to consult on allowing the change of use from retail and agriculture uses to residential as part of today's Budget.
Liz Peace, chief executive of the British Property Federation, said: "Retail to residential conversions could be an important step in breathing life into our high streets, and we would very much encourage a flexible approach, particularly in areas with increasingly obsolescent retail stock that is unlikely to be brought back into retail use.
"We welcome the proposal to consult further on change of use from agricultural to residential. It’s crucial that the countryside remains a place of growth, industry and business rather than an enclave of the retired and wealthy."