Institutional investment in the rental market to support the housing needs of people on low-to-middle incomes

Monday 13 December 2010 Housing, Wealth and Debt

On 13 December we hosted a roundtable, in partnership with Grainger, to explore whether and how institutional investment could support the housing needs of people on low-to-middle incomes. The roundtable event was attended by a range of stakeholders including institutions, housing associations, landlords, experts and government policy makers. Key barriers to institutional investment included:

  • lower net income returns in comparison to the commercial market;
  • the lack of scale to make sizeable investments;
  • tax impediments;
  • cost of land;
  • planning bureaucracy;
  • management burden and reputational risk that comes from direct investment;
  • lack of familiarity with the residential market;
  • the fact that the eventual sale of the property on the owner-occupier market is worth more than the rental unit.

A range of solutions and models were identified that would support further investment. We will be looking into these further over the coming months.