Large scale investment will be driven through changes to the tax rules affecting bulk purchases of buy-to-let homes, as well as through measures to encourage the growth of Real Estate Investment Trusts - the globally recognised model for real estate investment that provides low cost access to capital.
An independent review will also consider whether there are barriers to greater large-scale investment in rented housing.
Commenting on the strategy, Paragon Group chief executive Nigel Terrington said: “It is pleasing that the Government has recognised the important role the private rented sector plays in providing a home to millions of renters and that Housing Minister Grant Shapps has acknowledged landlords already comply with a comprehensive set of regulations.
"With tenant demand at the highest level we have seen in modern times and likely to grow further, it is important that the private rented sector has a committed base of investor landlords to enable it to grow, and fostering a fiscal and regulatory environment that encourages that is vital.
"Institutional investment will only play a complementary role to the mainstay of the private rented sector, the private landlord, and so whilst there is a focus on attracting greater levels of institutional investment into the sector, policies must not favour institutions over individuals.”
Ian Potter, operations manager of the Association of Residential Lettings Agent, said: "We are pleased that the Government has recognised the PRS in its housing strategy, and the important role it plays in today's struggling housing market.
"Equally, measures aimed at first time buyers and affordable housing tenants are welcome. While we would like to have seen some measures aimed directly at the PRS, the Government's commitment to conduct a review of investment into the PRS in the future is a step in the right direction and we look forward to the findings.
"The Government's acknowledgement that choice and quality is vital to tenants is also positive. To ensure they are protected from issues like loss of deposit, we would urge all tenants and landlords to use an agent regulated to a recognised body like ARLA."
