The Royal Institute of British Architects (RIBA) and Future Homes Commission have welcomed the Government’s announcement that will permit councils to invest twice as much of their pension fund assets in building more homes and infrastructure from 1 April 2013.
The announcement made by Local Government Minister Brandon Lewis yesterday directly reflects the recommendation made after a year-long study by the Future Homes Commission. The Commission proposed that money from local authorities’ pension funds should be used to create a £10 billion Local Housing Development Fund, which would build mixed-tenure housing in communities suffering from a shortage without increasing the government deficit.
Following a consultation the Government has decided that the current limit of 15 per cent was an unnecessary obstacle for authorities seeking to invest in infrastructure. The rules have been changed to enable councils to invest through limited partnerships up to thirty per cent of their holdings.
Speaking today, Chair of the Future Homes Commission, Sir John Banham said:
“This is a very welcome and important announcement from the Government, which directly reflects the Future Homes Commission’s call for Local Government Pension Funds to make the most of their assets by investing in new homes and infrastructure.
“Tackling the housing crisis is both a social and economic imperative and is the key to kick-starting economic growth. The priority now is for Local Government Pension Funds to come together, pool their assets and create a housing and infrastructure fund of the scale of the £10 billion Local Housing Development Fund recommended by the Commission. This type of initiative would enable better long-term returns for local government pension scheme members and deliver new homes on the scale and of the quality that is so desperately needed.”
Notes to editors
For RIBA and Future Homes Commission press queries contact the RIBA Press Office firstname.lastname@example.org or 020 7580 5533
Further information on the amendment to the Local Government Pension Scheme: http://www.legislation.gov.uk/uksi/2013/410/contents/made
The Future Homes Commission were tasked by the RIBA in September 2011 with conducting an inquiry into the quality of newly built housing with the aim of understanding how people live today, what they need and expect from their homes and whether the design and delivery of new homes is fit for purpose.
The Commission comprised of Sir John Banham, Dame Mavis McDonald, Roger Graef OBE and Kate Faulkner.
The Commission report ‘Building the Homes and Communities Britain Needs’ makes the following key recommendations:
• A three-fold increase in the number of new homes being built every year - from the current 100,000 to over 300,000
• A new, independently managed £10 billion Local Housing Development Fund, financed by the largest Local Authority pension funds pooling 15% of their assets to invest in new rental and shared ownership housing.
• A greater focus on design in all new homes, ensuring they meet current residents’ needs and making them fit for future generations
• A more consumer-oriented housing market, with reliable, comprehensive information available to the public
• A lead role for local government, using their powers and assets now to lead the creation of sustainable communities to meet local housing needs and capable of providing attractive investment opportunities for institutional investors.
Read the Future Homes Commission report here: http://www.architecture.com/Files/RIBATrust/FutureHomesCommissionLowRes.pdf