Lending schemes from the government might be helping buyers, but the real way to increase housing stock might lie in programmes that grow rental inventory.

The Guardian columnist Matt Cavanagh wrote an article in 2012 criticising the Chicken Littles of Britain who worry population growth is out of control and leading the country to ruin. “Should we see a rise in our population as a problem, or an opportunity?” he asks. “Are we simply ‘too crowded’ to cope with more immigration?” he continues, before proceeding to provide his own data and opinions that refute the worriers.

Cavanagh concludes that UK population growth has been decried for the past 100 years, and that with smart planning, lots of building and technological innovation – already underway – those problems can be mitigated.

Part of the writer’s argument is that England is not static, that the country has historically done well as it adapts to change. Also, that the land mass can support a larger population quite handily. One such change already underway is the shift from an ownership to a renter society, as illustrated by how things have changed in the past ten years. A decade ago new housing included about 10 per cent of inventory for rental; today, that number is closer to 17 per cent, and it’s projected to rise to 20 per cent within the next decade.

HM Treasury, the government’s economic and finance ministry, issued a report in 2010 (“Investment in the UK Private Rented Sector”) that acknowledged a plethora of factors favour increasing the country’s stock of rental housing to ease the burden of a housing undersupply. These factors include macroeconomic stability, meeting peoples’ housing aspirations, creating sustainable communities and establishing labour market flexibility. By increasing to-let housing, the country will get more affordable homes overall.

Since then the government has created two programs to encourage investors (such as those who seek UK joint venture land opportunities) to put money into both social and private housing development. One, a scheme for affordable housing with debt guarantees, enables the raising of debt with government backing. This effectively makes it possible to build more new rental homes because borrowing costs are lower. For building in the private rented sector, investors are also given similar debt raising support with the same expected outcome of additional building.

The Royal Institution of Chartered Surveyors (RICS) is proposing some new ideas as well to goose the rental housing market. In a report released in June 2013, RICS recommends new tax bands for higher-value properties, and it suggests providing incentives for pensioners to downsize to smaller homes. RICS was critical of much ballyhooed government schemes that help homebuyers, arguing that those are most beneficial to people who could afford to buy anyway; until there is an increase in he housing supply, millions will continue to be shut out of buying altogether.

Instead, RICS proposes releasing public lands for more residential development, which could accommodate building up to 250,000 new homes in the next few years. Another proposal is that developers be required to build within three years of receiving planning consent. Also, RICS proposes a scheme to enable lower-income renters to accumulate a “portable home ownership discount” over time that would ultimately enable them to buy their homes.

RICS also suggests that self-invested pensions (“Sipps”) could be directed to investments in new-build residential property.

Cavanagh, the Guardian columnist, acknowledges that population growth will require not just housing but investments in infrastructure and public services. But he doesn’t read these as insurmountable problems. Rather, it would take the creativity of ideas such as those provided by RICS to figure out solutions to these concerns.

Investors in the housing market – be it for-let or for sale – are advised to keep current on such lending schemes and the direction of policymakers on the local and national level. When determining to invest in strategic land or real estate, such as with capital growth investments (in a Sipps programme, for example), the advice of a personal financial consultant should be enlisted to ensure a good balance of risk within an overall wealth development plan.