The British Property Federation (BPF) has voiced enthusiastic support for the Government-backed Montague Review, which aims to encourage greater investment in so-called ‘build to let’ homes.

Led by Sir Adrian Montague, the review will examine what barriers exist to greater institutional investment in the private rented sector, and how the supply of these properties can be increased in line with rapidly growing demand. Ian Fletcher, Director of Policy (Real Estate) at the BPF will advise the review as part of a nine-strong expert industry panel.

Liz Peace, Chief Executive of the BPF, said: “The industry has a golden opportunity to articulate why residential investment could be an attractive asset class for institutions and what prevents the considerable interest in the sector turning into a greater flow of funds into it.

“Sir Adrian is an excellent choice to lead the Review and I hope this call for evidence elicits a positive response. Our country needs a lot more homes and there has probably never been a better time to make the case for building-to-let.”

Current UK institutional investment in housing – from companies such as insurance or pension funds – is estimated at less than £4.5bn by IPD, just a fraction of the estimated £840bn total value of the private rented sector. At present it is dominated by small landlords, who the BPF say ‘lack the resources to underwrite the development of new housing.’

Recent research by property agents Savills suggests the sector has the potential to develop 125,000 homes per year by 2016. The review will aim to build on work already undertaken by the Government and supported by the BPF, such as changing the stamp duty land tax regime for bulk residential purchases, reforms to residential Real Estate Investment Trusts in the United Kingdom, and the Homes and Communities Agencys private rented sector initiative.