The British Property Federation is calling for a radical shift to renting with large firms providing homes to rent on a long term basis.
With repossessions almost doubling and tens of thousands facing negative equity, the BPF said it believes that a professionalised, branded rental sector could be the answer to Britain's woes.
It told delegates at its annual residential conference in London that current government policy is still focused too heavily on ownership. Many housing associations are facing real problems as shared ownership schemes are left vacant due to a lack of lending, with banks seeing such initiatives as 'sub prime' given the high proportion of repossessions.
The BPF, which represents the interests of those who own and invest in property, called for changes to stamp duty, local housing allowance and the planning system which it believes will help the rental market and encourage private companies to invest in a professional rental sector like that of the US and Europe.
The BPF wants to see changes made to the charging of stamp when buying multiple properties so that it is charged per purchase and not on the collective amount, this would greatly reduce costs for large investors buying a portfolio of properties which they could then professionally manage.
It also wants rental developments to be specially recognised through the planning system, given the different financing model they use to properties built for owner-occupation.
'Over the past decade the private rented sector has proven itself invaluable to Government objectives. It has facilitated the rapid expansion of higher education, housed those unable to find any other home, and supported the UK's flexible labour market,' said Ian Fletcher, BPF residential director.
'The sector's ability to adapt has been a huge strength; one that is even more invaluable in current economic conditions, which the Government should be harnessing. We have had an excellent independent review of the sector. It is now time to act on it and start moving forward, so that the sector can drive up standards, add to supply, and ultimately achieve its full potential,' he added.
The BPF is also calling for a return to the old payment method of direct payment of local housing allowance to landlords. The government scrapped the old regime last April, risking the security of thousands of vulnerable people who may not be best positioned to manage their own finances. The new system risks private landlords taking their properties out of the market for social security tenants.
