Pensions Could Be Used To Build Homes

According to the Future Homes Commission, a body set up by the Royal Institute of British Architects (RIBA), up to 300,000 homes could be built every year in the UK by using council pension funds.

The proposal entails pooling some of the assets in the largest 15 local government pension schemes to provide a £10bn housing fund, which would lead to economic growth and lead to the creation of tens of thousands of jobs without touching a penny of government money.

The year-long study, created by the Commission, has been met with approval by Housing Minister Mark Prisk, who described the proposals as innovative and interesting.

A similar approach to the one proposed is already being pioneered by Manchester City Council, which is working with the Greater Manchester Pension Fund (GMPF) to build 244 homes.

The city council will release land into the joint venture at fair market valuation and GMPF will inject £25m to pay for building work. Both partners will then receive a capital payment on the sale of houses and an annual revenue return.

Describing the current housing market as “dysfunctional”, Chair of the Commission, Sir John Banham, has said that local government could become the leader of new development 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

The Commission’s report, called Building the Homes and Communities Britain Needs, looks at various ways of building high quality, affordable housing in the UK.

Other proposals include greater use of brownfield land for development, greater focus on the design of homes, and a more pro-active role by local councils.