We've heard a lot recently about the plight of the first time buyer. Over the past week, major banks and building societies have announced that borrowers without a 25 per cent deposit will be excluded from the best mortgage deals.

And according to a new study by Abbey, almost two-thirds of those aiming to becoming first time buyers at the beginning of the year have decided they are not looking for a mortgage after all.

Home ownership will always be an attractive prospect, but it's not the right move for everyone. Renting a home is often seen as a poor alternative. But it doesn't have to be this way – it's actually a positive lifestyle choice in other European countries. It's interesting to note that the UK's homeownership rate is around 70 per cent, compared to 43 per cent in Germany and 63 per cent in France.

The All Party Urban Development Group (which I chair) has a new report out on affordable homes. Our report points out that the target of 3 million homes by 2020 is under threat, unless private sector investors such as pension funds and insurance companies are encouraged to invest in building and managing good quality homes for rent.

Common in Germany, Switzerland and the US, these housing developments, funded by private investors and maintained by responsible management companies provide good quality accommodation which people actually choose to rent rather than buy.

Large companies already invest in commercial property in the UK. Now more needs to be done to encourage large companies to invest in rental housing for the long-term. We have 3 million new homes to build and private house building, social homes and ad hoc buy-to-let won't make up the shortfall, though we need to see changes in approach to ensure they play their part as well.

The All Party Urban Development Group is hoping to feed in to the Government’s review into the private rented sector. The Government should take action to remove the barriers to long-term investment in private rented housing – whether through real estate investment trusts (REITs) or other mechanisms.

If these property developments are to be a genuine alternative in our 'homeownership at all costs' culture, we'll need to see long term investment in a 'quality product'. This means good management of new and existing homes – so people feel the benefits of 'hassle free' renting over home ownership.

It means the possibility of longer tenancy periods to encourage a wider range of tenants. It also means a good mix of dwellings, rather than just one and two bed flats – and a better balance between owner-occupied, social rented and private rented housing.

With the housing market and delivery of the government's house-building target looking more uncertain, it's clear that home ownership is not necessarily the right thing for everyone at the present time. Now is the time to make renting a more attractive alternative.

The All Party Parliamentary Urban Development Group (APUDG) is a cross-party parliamentary body of MPs and Peers committed to progressing urban renewal and sustainable development in the UK. The Centre for Cities and British Property Federation provide secretariat services for the group.