Strictly embargoed until 00.01 hours 27th January 2009. Leading figures from the property industry will meet today at the British Property Federation's (BPF) Annual Residential Conference in London to call for a radical shift to rental.

With repossessions almost doubling and tens of thousands facing negative equity, the BPF believes a professionalised, branded rental sector, where big firms provide long term homes to rent, could be the answer to Britain's woes.

Current government policy is still focused heavily on ownership. However, many housing associations are facing real problems as shared ownership schemes are left vacant due to a lack of lending, with banks seeing such initiatives as 'sub prime' given the high proportion of repossessions.

At today's conference, the BPF is calling for changes to stamp duty, local housing allowance (LHA), and the planning system which it believes will help the rental market and encourage private companies to invest in a professional rental sector like that of the USA and Europe.

Speakers include Sir Bob Kerslake, chief executive of the Homes and Communities Agency (speaking at 3pm), as well as Peter Marsh, chief executive of the Tenant Services Authority, Fionnuala Earley, chief economist of Nationwide Building Society and Richard Blakeway, housing adviser to the Mayor of London.

The BPF wants to see changes made to the charging of stamp when buying multiple properties so that it is charged per purchase and not on the collective amount, this would greatly reduce costs for large investors buying a portfolio of properties which they could then professionally manage.

It also wants rental developments to be specially recognised through the planning system, given the different financing model they use to properties built for owner-occupation.

Ian Fletcher, BPF residential director, said: "Over the past decade the private rented sector has proven itself invaluable to Government objectives. It has facilitated the rapid expansion of higher education, housed those unable to find any other home, and supported the UK's flexible labour market.

“The sector's ability to adapt has been a huge strength; one that is even more invaluable in current economic conditions, which the Government should be harnessing. We have had an excellent independent review of the sector. It is now time to act on it and start moving forward, so that the sector can drive up standards, add to supply, and ultimately achieve its full potential." The BPF is also calling for a return to the old payment method of direct payment of local housing allowance (LHA) to landlords. The government scrapped the old regime last April, risking the security of thousands of vulnerable people who may not be best positioned to manage their own finances. The new system risks private landlords taking their properties out of the market for social security tenants.

Experts' views:

Stamp Duty

Duncan Owen, chief executive of Invista Real Estate Investment Management Ltd:

“To help the market Government needs to allow stamp duty to be calculated at the rate of the individual property regardless of whether it is acquired individually or collectively, not at the rate of the collective price.”

John Savage, director of Cornwall Residential Landlords Association:

“Government must abolish (even if only temporary) SDLT, and then just stay out of the picture, let the market decide - laissez-faire.”

James Kingdom, Colliers CRE's head of residential research:

“Government must look to extend the stamp duty holiday. A bit like the VAT cut, the stamp duty exemption for homes below £175,000 had the right intention but was too little or ineffective to have a real impact.”

Planning James Thomas of Jones Lang LaSalle: “Government needs to streamline the planning process to reduce the costs and time in securing planning permission and in doing so to boost supply to meet medium to longer term housing demand.” Jacqui Daly, director of research at Savills:

“Government should lower S106 requirements to encourage the delivery of new homes. There is likely to be a shortage of housing for sale when the market recovers. Lower s106 requirements would improve development viability and may encourage residential property investment for income returns rather than capital growth performance. This could make build-to-let schemes one of the most active of all property development scenes for the next few years.”

Lending

James Kingdom, Colliers CRE's head of residential research:

“Following the £37bn bail-out of the three main banks, the Govt should deliver a final ultimatum to the banks to start lending again, particularly to first time buyers. Affordability in theory is at its lowest level for years yet getting on the ladder is still beyond many first time buyers who can help keep the market ticking over because the constraints from the lenders are too great.”

Peter Lewis, secretary of the Devon Landlords Association:

“The government needs to enable investors in the property market, especially those who might wish to increase their property portfolios and have a record of success in managing properties, to borrow money from one of the Government owned or sponsored Banks at a rate of interest of 4% fixed for the duration of the loan. This would increase the money flow in the market place and enable investors to gain a reasonable return for their risk and involvement in the letting market. The RUGG Report has identified that the Private Landlord provides a good service and by providing Government backed funds to this group of entrepreneurs the Government would have a real investment in the housing stock without the burden of maintaining day to day control and administration.

“Government also needs to reduce the hassle that the implementation of LHA has caused to the residential landlord by returning to the old system and paying the LHA direct to the landlord. The number and level of problems caused by the new system has resulted in many good landlords leaving the letting market.”

Peter McEachran, a partner at Graham and Sibbald's Paisley office:

“The Government should encourage the banks to improve credit facilities for secured lending purposes. In particular, only once there is a ready availability of 90-95% loans will we see a significant turnaround in the market.”

General

Liam Bailey, head of residential research at Knight Frank: “The reality is forecasting has become a game of luck - the ability to forecast sentiment, the libor and base rate spread, or the next government intervention is impossible with any degree of accuracy.” Graham Gould, managing director of COBA asset management:

“2009 will be extremely difficult for consumers and businesses, but it is also a time of enormous opportunity – we are clearly at a point of structural change in the economic cycle and for those who read these changes correctly there will be the opportunity to flourish in the medium term.”

Elliot Lipton, managing director of urban development and investment company, First Base:

“Government has a clear understanding of the challenges faced and DCLG is responding to the paucity of debt and equity within the current property market. “Following the recent merger of English Partnerships and the Housing Corporation, the HCA will rapidly gather momentum as the new agency takes on an increasingly important role in the UKs future housing pipeline. “Crucially though there must continue to be a focus on place-making and delivering high quality, well-designed and greener homes within sustainable communities. This will rely even more now on collaboration between the public and private sectors.”

Lindsay Holdoway, managing director of HPH Ltd:

“To aid the housing market the government should permanently reduce stamp duty to 1% (0% below £75000) for commercial and residential property; suspend HIPS for at least one year; review the taxation of property entirely including the possibility of an element of CGT for primary residence (to reduce the scale of future upturns/bubbles) and 100% rates liability for second homes.”

Dave Owen, executive chairman of Pengaron Group plc:

“The government must change stamp duty so that it is not “stepped” (i.e. nothing on the first (say) £100K, 1% on the next £100K, 2% on the next £200K and 3% thereafter); guarantee 50% of interest on new mortgages (not only first time buyers) up to £400K, and abolish home information packs (except for energy efficiency survey), then we may see the housing market start to recover.”

Yolande Barnes, head of residential research at Savills:

"For months now we have been stating that the fundamental downward pressure on the UK residential market is the lack of mortgage availability, not the cost of mortgages or the affordability of homes. Only when liquidity returns to the lending markets, and there is a sense that the worst of the recession is over, will the market hit bottom.”

Jim Ward, director of Savills research with particular responsibility for residential development:

“The three things the government needs to do to aid the housing market are increase liquidity in mortgage markets, increase liquidity in mortgage markets, and increase liquidity in mortgage markets.”

Ian Kernohan, economist at Royal London Asset Management:

“The Government should concentrate on creating the conditions for economic recovery in general rather than housing in particular. They should allow house prices to fall to levels where buyers want to buy and then lenders will want to lend on more attractive terms.”

Peter Sceats, director of Tradition Property:

“To aid the housing market government needs to cut wasteful spending, end stamp duty on a person's main domicile and focus on helping employers keep people in jobs.”

-Ends-

Andrew Teacher / 07968 124545 / ateacher@bpf.org.uk Madeleine Williams / 020 7802 0364 / mwilliams@bpf.org.uk

Press departments:

Colliers CRE - 020 7344 6706

Jones Lang LaSalle - 020 7399 5616

Savills – 020 7409 8940

Graham and Sibbald - 0141 567 5396

Knight Frank - 020 7861 1744

First Base Ltd - 020 7851 5555

Royal London Asset Management - 020 7506 6779

Notes for editors

Please click here to view King Sturge's residential bulletin

Professional Rental Sector

Number of PRS landlords/ Number of PRS tenants:

- “almost 2.6 million homes in England being rented from over half a million private landlords”. Source: http://www.communities.gov.uk/news/corporate/670940 , 23 January 2008

- Many UK households rent privately. Analysing the people and households living in private rented accommodation in 2001, the University of York found that: • 11% of households in England were renting privately • Use of the PRS is largest of all in Greater London, where 16.4% of households were living in the PRS. • http://www.privaterentedsector.org.uk/ Value of the private rented sector

- “A report for the Association of Residential Letting Agents estimates that the value of assets in the private rented sector has reached £500bn, which it says outstrips the total of all privately owned commercial property. It forecasts rents are set to climb by up to 15% over the next two years which it thought would be of some comfort to buy-to-let landlords facing a rapid decline in the capital value of their properties.” Source: FT, 15 July 2008 - http://www.egi.co.uk/Articles/Article.aspx?liArticleID=685932

Mortgage Lending

Gross mortgage lending reached an estimated £12.6 billion in December, down 11% from £14.2 billion in November and 47% on December 2008, according to the Council of Mortgage Lenders. This is the lowest monthly figure since April 2001. Lending totalled £256.4 billion over 2008 as a whole, down 30% on £363.7 billion in 2007 and the lowest annual figure since 2002. Recent mortgage approval figures from the Bank of England indicate lending will decline further in the coming months, so improvements in lending are unlikely to be seen in completion levels until the second half of the year at the earliest. (CML Press release, 21 January 2009)

Mortgage Lending -44.3% (Hometrack, http://www.hometrack.co.uk/index.aspx )

House building

-9.8% (Hometrack, http://www.hometrack.co.uk/index.aspx )

Affordable Housing: http://www.communities.gov.uk/publications/corporate/statistics/affordablehousing200708

Mortgage Lending: http://www.cml.org.uk/cml/statistics

Research on PRS: http://www.york.ac.uk/inst/chp/themeprs.htm

Andrew Teacher / 07968 124545 / ateacher@bpf.org.uk Madeleine Williams / 020 7802 0364 / mwilliams@bpf.org.uk