The government has announced a series of new measures designed to encourage private money into buy-to-let mortgages in order meet ambitious housing targets.

Under the plans investors who fear that returns from the traditional buy-to-let market are evaporating may be able to access off-plan rental accommodation.

One way is to introduce new planning rules for so-called build-to-let schemes. These are developments funded by the private sector that would be earmarked for professionally-run rental accommodation.

“There is insatiable demand for rental accommodation at the moment,” says Ian Fletcher, director of residential policy at the BPF. “Advance buy-to-let investment sales have encouraged development in recent years but in the near future it doesn’t look like that investment will take place on the same scale. The government needs an alternative.”

Unite is a specialist company that lets a number of modern studio flats in central London to graduates who are generally priced out of London’s property market.

“If a block is designed to be let, developers can increase the density and make it more attractive to investors,” says Mark Allen, chief executive of Unite. “It can be built to deliver a higher yield, more akin to commercial property.”