星空传媒

The housing sector faces one pretty insurmountable challenge right now.

Put aside the worries over planning, affordable housing and access to development finance: it鈥檚 mortgages, stupid. The latest figures from the Council of Mortgage Lenders show that the volume of mortgage lending is still running at not far above half its long-term average. Any desire to return to 2007 - or, God forbid, sixties - levels of housebuilding, runs up against this problem. Namely, how to replace the approximate 拢75bn a year that until 2008 was being invested in the sector. Because lending volumes are not predicted to improve any time soon. And forget any notion of affordable housing filling the gap - with spending more than halved by the coalition and recent announcements promising little more, government funding is just not there.

No surprise then that almost everyone in the housing sector - builders, developers, politicians - are looking to the private rented sector (PRS) as the great hope for growth. The idea is that if a way can be found to attract institutional investors - pension funds, insurance funds, sovereign wealth funds - to put money into rented housing schemes, a new source of funding for house construction can be found. New buyers, in the form of institutions who then let the properties privately, will mean more homes built. Supporting this view is property data expert the Investment Property Databank (IPD), showing that over the last 10 years investment in housing to rent by commercial investors has outperformed money put into commercial property or the stock market - both darlings of the institutional sector.

This interest has prompted a flurry of political and developer activity around the issue - including the possibility of hard cash from the government and up to 拢10bn of guaranteed returns for investors, underwritten by the taxpayer. But despite this talk, so far very few deals have been signed. So is the private rented sector really the white knight ready to ride to the rescue of the UK housebu