DTZ report warns that the current Government housing strategy is doomed

The report criticises the Government for not addressing the "fundamental issues" of long-term funding and suggests that the Government adopt a model where financial institutions make up the funding shortfall via long-term investment in new build homes for rent.

"In the continued absence of long-term finance for new homes, completions will inevitably fall a long way short of demand – even if the supply of land is greatly increased," DTZ said in its report.

It is calculated that despite the new homes currently being built and the new homes expected under the planned reforms, the country is still 70,000 new homes a year short of the anticipated 230,000 annual need.

“[Government strategy] will not deliver the number of new homes the nation needs. A third leg, long term institutional investment in the residential sector, is essential," said Chris Cobbold, head of DTZ’s residential practice group.

The report concludes that there are three steps necessary to attack the continued shortfall. It recommends that the traditional buy and sell market continues for those who can access long term funding through mortgages.

This should be supported by "affordable housing" which is delivered via public funding, and development on publicly owned land with access to private finance in the form of long term borrowing.

The final limb of the report concludes that new homes for market rent should be developed using long term institutional investment to support the rental market upon which most of the population rely.

It is argued that "pilot schemes" to "showcase development" for the suggested funding model are advocated. Such schemes would alleviate the perceived risks and make finance more readily available, the report said.