Pensions

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Plans are being made to encourage pension funds to invest in the private rental sector in a bid to get the housing market moving.

The Homes and Communities Agency has developed a model allowing investors to put money into rental properties on a large scale for the first time.

The company is hoping that the move might help stalled building developments and provide some support to the house building industry.

Sir Bob Kerslake, chief executive of the HCA, said: "Our initiative is one of many innovations we have used to attract new investment, kick start stalled housing schemes and mitigate against the effects of the market downturn."

The main focus outlined in the plan will be on building new homes to rent but could also include some recently built properties.

The initiative would form a key part of Government proposals that are expected to be announced in response to the Rugg Review, which was released last year.

Around eight companies are said to be in talks about the scheme, including two housing associations and one large pension fund.

The British Property Federation welcomed the initiative but continues to call for changes to be made to stamp duty to help encourage large investors.

Liz Peace, chief executive of the British Property Federation, said: "The task now is to stimulate interest in the HCA's proposals, encourage some innovative bids and ensure that we create some attractive proposals that provide solid returns for investors and more importantly, tenants."