Council pension funds to be freed up for housing
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by Gill Montia
Councils are to be allowed to use more of their pension funds to build new homes.
Currently, local Government pension schemes across England and Wales hold combined investment assets of around £150 billion.
However, fund managers are limited in the amount they can invest via partnership arrangements, which typically apply to housing developments.
But the Government intends to increase the current limit of 15% to 30%, giving councils the scope to inject a further £22 billion into key projects such as new homes, roads and high speed rail.
Local Government Secretary, Eric Pickles, comments: “Unlocking Town Hall pension pots so they can be used to invest in vital infrastructure projects is a common sense decision that will help this country complete on a global scale and get Britain building.”
A recent report from the Future Homes Commission called for a three-fold increase in the number of new homes being built every year (from the current 100,000 to 300,000) and the setting up of a £10 billion local housing development fund.
The Commission also wants to see a greater focus on design in all new homes, making them fit for future generations and therefore attractive to UK and international institutional investors.
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