LONDON — British Prime Minister Theresa May’s Conservative government has announced that it will abandon plans to create a private property investment company.
The move, which is expected to be announced this month, will save the UK some $8 billion annually by giving the private sector a stronger voice in the investment and management of British property.
The government says that the new company will provide investment, ownership, management and regulatory oversight for the UK’s private rental sector.
But the new system is already drawing criticism, particularly because the government is not allowing it to hold real estate auctions or take ownership of any new properties that it does acquire.
The new entity will be called the Property Investment Company Limited, and the name will be changed to the Property Management Limited.
It is unclear whether the name change will affect the company’s financial status or its future role.
The announcement will be met with criticism by some private sector analysts, who say the government has failed to explain the new structure in detail and has not outlined how it will be paid for.
“The Government’s proposal to create the Private Property Investment Corporation has been the biggest and most expensive attempt at privatizing British property in recent memory, and will leave the country with no real oversight,” said Simon Green, a former senior economist at the International Monetary Fund.
“It is also highly uncertain how the Government will manage the new entity.
The existing government’s financial structure is not sound and will only get worse in the years ahead, and it will need to be reformed before it can truly succeed.”
A spokesman for May’s office said the government was not ready to give up on the plan for a new private property company.
“We are committed to providing the best public services for all our people and we are not going to stop fighting for them,” the spokesman said.
“What we will do is give the private property industry greater opportunities to grow and we will ensure that the government remains a key player in the private rental market, even as it takes responsibility for ensuring that there are appropriate regulations for the private investment industry.”
Critics also said the announcement will leave private property owners with less control over the market and will make it harder for them to build new properties.
“This is an extremely risky and unnecessary approach to privatization,” said Tim Pryce, chief executive of the Property Industry Association.
“If they can get away with it, we will have to find a new way of doing business.” “
Theresa May is expected on Friday to announce a raft of measures aimed at reforming Britain’s property market, including plans to allow more people to own their own homes and provide a guarantee that all property purchased by people over the age of 55 will be taxed at the same rate. “
If they can get away with it, we will have to find a new way of doing business.”
Theresa May is expected on Friday to announce a raft of measures aimed at reforming Britain’s property market, including plans to allow more people to own their own homes and provide a guarantee that all property purchased by people over the age of 55 will be taxed at the same rate.
She will also announce a plan to provide a tax relief to the private landlords and owners of properties that are under construction or have been built up.