Ministers consider scheme to kickstart housing market

Senior Whitehall officials are devising a scheme to help revive the UK property market by injecting public sector equity into social housing developments, by encouraging pensions and insurance firms to invest.

The thinking behind the new strategy, aimed at boosting the amount of affordable homes built in Britain, is that for every pound of government money, up to £6 of private capital is invested by institutions.

After being informally approached about the scheme by Whitehall officials, a senior insurance company fund manager said: "If the government can put something together that might look like a bond with some sort of guarantee on the level of income and its duration, then there is a good possibility that a lot of institutions might find that attractive. But they will have to package it up in that way."

Ministers are expected to have reached a decision on whether or not to go ahead with the new multibillion-pound infrastructure fund by next month.

Source: guardian.co.uk | Last updated: 14th January 2009

View property news archive »