Critically examine changing institutional engagement with the residential sector in the UK - Essay Example

A number of institutions currently engage with the residential service providers due to a number of reasons. This essay seeks to examine critically the changing institutional engagement with the residential sector in the UK. It will look at the reasons for low institutional engagement in the country, the trends in the residential sector, factors facilitating the increased level of institutional engagement in the residential sector and the impact of the increased institutional engagement. Finally, it will draw conclusions from the study results.

State of Residential Sector in the United Kingdom Residential sector, defined as the occupied or unoccupied, owned or rented, single-family or multifamily housing units, does not include institutional housing (Mullin 2006 p. 227). Among these, include hostels, school dormitories, and hospitals among others. Arimah (2000, p. 2552) points out that compared to the public sector, residential sector scores significantly low in the level of investment. Despite people, suffering from high rental costs and poor housing qualities, the much efforts put towards improving the situation appear rather weak.

The investment scene in the United Kingdom has typically limited institutional investment compared to other countries such as the United States (Montezuma 2006, p. 884-890). Generally, there are low investment levels in the country despite the existence of capacity to build and high demand for residential houses. Even though it is a large sector, there are special characterizing features for the same. There is low construction of new houses, making the sector highly uncompetitive and less dynamic.

The only activity-taking place in the country is the purchase of ex-public housing, as there is low construction of new houses (Montezuma 2006, p. 892-893). Few investors, if any take part in institutional investments, argues Van Daalen & Van Der Land (2008, p. 318). Those who take part in this form of investment in most cases focus on the public sector and corporate investment. Thus, few companies take part in the rental business. The most active company in providing residential housing services to the people in the United Kingdom is the Swiss institutional investment, which mainly focuses on the domestic investments.

Compared to countries such as the United States that has a high volume of trade and investment in inter-country residential investment, the United Kingdom has little of such activities. There are hardly any cross-country and pan-European holdings, observes (Montezuma 2006, p. 898). Thus, all investments activities appear rather localized and concentrated in a particular place. In some countries, there is a high level of investment activity taking place, with a high number of investments taking place being extremely significant.

On the other hand, some countries in the UK have little or no institutional investment at all. Regulatory framework, arguably the biggest inhibiting factor in the sector for this scenario appears to favour a number of countries unlike others (Andersen 2008, p. 264) Unlike in America where inter-country investment takes place against a backdrop of increased residential investment, here, the level of innovation in the sector is considerably low. The low investment in the sector has contributed to low supply of residential property in the various UK countries. The