But the scope of the government consultation actually announced is far more limited than the headline suggests. It does not cover all homes, or even all private-rented sector homes. It only covers, to quote the Budget document, "the conversion of unused space in commercial properties in high streets and town centres to residential use".
Moreover, it is far from clear that even this limited line of consultation will yield fruit. You might expect the self-invested personal pension (Sipp) industry to welcome any move to loosen the strict rules guiding qualifying investments. But the reactions I have solicited range from circumspection to outright opposition. "Anything with a bed has always caused problems," says Andy Bell, founder of Sipp provider AJ Bell and a particularly vocal critic of the reform.
Perhaps the main reason for the scepticism is historical. This has been tried - and dropped - before. Housing was supposed to become a qualifying Sipp investment back in April 2006 as part of the previous government's shake-up of the pensions system (so-called 'A-Day'). Even primary homes were due to be included in the list of investable assets.
But faced with an ever hotter housing market and endless media stories about how spivs were gearing up to abuse the system, chancellor Gordon Brown used his 2005 pre-Budget report to perform a last-minute U-turn. Standard Life wasted £3.5m gearing up for what was expected to be a revolutionary change, according to a contemporary report in The Scotsman. "We're all a bit scarred," says Mr Bell.
Now the housing market is much cooler than in 2005, and the government thinks it can eliminate the scope for abuse by restricting investment to conversions. So what could go wrong?
Under current rules, investors can use their Sipps to buy a shop, get planning permission for a conversion and even start the building works. But to enjoy their capital gains tax-free they are obliged to sell before their flat receives a "certificate of habitation", according to the Sipp fine print. In practice, no such certificate exists, so Sipp providers have to interpret this metaphorically. Paula Pearce, who manages property investments for Sipp provider European Pensions Management, says she advises clients to sell before plumbing in the bathroom or kitchen. "The problem is you end up with something that's quite hard to sell. We do get enquiries about conversions to residential, but few go through because of this issue about finishing it off," she explains.
The government's mooted reform might encourage some investors who were put off by the ill-conceived certificate rule to undertake conversions. But that still leaves the question of when the home needs to be sold. Immediately after completion? Within a year? Without a cut-off date, Sipp holders could simply use the legislation to house their children at university in a second home, tax-free. But a fixed deadline for the sales process would create its own problems, given the illiquidity of property.
More intractably, the whole concept of buying shops for conversion runs counter to the underlying principle that a Sipp is for investment, not trading. Property conversions - whereby a property is bought not for its income but for the purpose of adding value and reselling it - would normally be considered a trading activity.
This distinction sounds arcane, but the blurring of it raises all sorts of questions. If an individual used his or her Sipp to run a tax-free retail-to-residential property conversion business - or an entrepreneur set up a scheme to offer a conversion service to Sipp holders - would it be considered abusive? If so, how does the government expect to attract the necessary capital into conversions - and where does it draw the line? If not, would the reform open the door to other tax-free trading activities? "We want no ambiguity, because it can lead to bad press," warns Martin Tilley of Sipp provider Dentons.
The conversion idea seems stuck between a rock and a hard place. If the government draws the rules too tightly, the policy will be ineffective. If it loosens them, it risks opening the system to abuse. The balancing act is made harder by the competing interests of different government departments. The reform is designed to expand the housing supply and rejuvenate high streets - a priority of the Department for Communities and Local Government. But its implementation relies on the Bank of England, which has just taken control of pensions regulation from the Financial Services Authority (FSA), and HM Revenue & Customs. These both have a clear interest in quashing it - the Bank because property development is illiquid, risky and prone to scams; HMRC because of the scope for tax evasion.
There is a broad consensus that the country has a shortage of housing and a glut of shops on dying high streets. But the government is struggling to find ways to correct the imbalance beyond doling out old-fashioned subsidies. Private-sector solutions sound wonderful - but making them work seems to be harder than we children of Margaret Thatcher were brought up to believe.
