One of the great and still largely unsung successes of recent years has been the effort by the Stock Exchange and associated broking firms such as Numis, Canaccord and Investec to establish a market where middling-sized companies can raise loans with the money supplied by individual investors.
The sums involved are typically between £30m and £100m, sometimes larger, and the total raised in the last couple of years is now around £2bn.
The investors take a risk that the company will go bust and not repay them, but in return they get an interest rate of between 5 and 7 per cent, which makes such bonds a popular way to save for a pension.
Last week, for example, saw a private schools group called Alpha Plus raise £40m, secured against its existing properties which it will use to build and open more schools and maintain and upgrade its existing estate.
By chance, on Wednesday I bumped into its chairman, Sir John Ritblat, whom I had not seen in the five years or so since he ceased active involvement with British Land.
Apart from schools, the septuagenarian Sir John keeps an eye on Delancey, a property business run by his son and which, with Qatari money, has the contract to turn the 2012 athletes' Olympic village in Stratford into 2,800 apartments for rent. But this, he says, is just the first step in an ambition to become one of the UK's largest residential landlords.
There is certainly a pressing need. Back in the 1930s, when the population was just two-thirds of the size it is today, we built an average of 300,000 houses a year from 1932 to 1939, and that delivered the 4 per cent growth rate that got the economy out of the slump. Last year we built just over 100,000. This is so far below what is needed, it is a national disgrace, but according to someone I was talking to at the National Housing Federation conference on Tuesday, even this inadequate figure could be a bit of a stretch next year. The reason is that Chancellor George Osborne slashed the funds available for social housing when he came into office.
Most of what has been built in the last couple of years has been with money secured and land bought in the last days of the Labour Government. This money is now running out, and next year's build will be significantly lower.
This is potentially disastrous, and not just because the houses won't be built.
There is a raft of evidence that housing associations create more cohesive societies, with significant reductions in crime and social problems. Their developments pay for themselves 10 times over if they reduce the likelihood of social unrest and bring hope and self-belief to deprived communities. Starving them of money is about as short-sighted as it is possible to be.
It does not have to be this way. Some of the larger associations are tapping into the aforesaid retail bond market, with Raglan, for example, raising £50m in September with an issue bought in its entirety by the Pensions Corporation, a pensions providing insurance company. But it is not enough. What we really need is for local authorities like Manchester, Leeds and Nottingham to float housing bonds in a similar way, but for much larger sums. They could then channel those millions into the thousands of housing associations which are too small to raise funds on their own account.
This does not happen because the Treasury – and hence George Osborne – does not want local government to be financially independent.
Logic is not the politicians' strong suit.