The British Property Federation (BPF) has called for the government to look at new measures to encourage funding for new homes, including planning reform and widening affordable housing criteria.

The BPF has warned that rents could rise amid growing demand for rented property.

It says the latest government figures on housing starts are unsurprising and offer another stark reminder of current poor housing market conditions.

BPF would like an institutionally funded build-to-let sector which could bring in the funding needed to develop quality accommodation for longer-term rental, and would also serve to stabilise the housing market.

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Private investors cannot afford to buy, meaning that buy-to-let cannot expand, despite growing demand for rental accommodation. Without increased supply, however, rents are rising and this will eventually compound the already significant problems we face.

Ian Fletcher, Director of Residential Policy, said: "We need to create new opportunities, where people who cannot afford to buy are able to rent with the prospect of staircasing into ownership in the future, underpinning an inclusive and responsible approach which recognises that there are many people who simply cannot afford current levels of deposits, and do not want to be taking on mortgage debt in current conditions.

"The BPF believes that ministers must look to encourage institutions - such as pension funds - to invest in long term housing solutions. This can be done with planning reform, to recognise rental development in its own right, and through widening the scope of 'affordable housing'.

"We need to improve supply, ensure it is affordable, does not require significant access to mortgage finance, nor put undue strain on public finances. Only an institutional-funded professional rented sector, building to let, ticks all these boxes."

(CD/JM)