The role of investors in the economy is ultimately to finance new development. ===> False. The role of investors is to make money.
If you build more, rents will go down. ===> In theory True. In practice self builds lower the pricing. The barriers set by bureaucracy for the sake of bureaucracy are the problem and they cause property prices to go up. EDIT: Restrictions set by bureaucracy is what creates artificial scarcity(think diamonds market)
"They provide valuable liquidity to the market" ===> False. It's long term value storage and/or speculation.
The same properties would be bought by new families if they were closer to a realistic price. You'd get the same if not more cash movement if it would be affordable. By affordable I mean: A young couple with minimum wage should be able to pay it off in 10-15 years with no problems. Not in 35-50.
As a sidenote(IMHO): Ideally, property ownership should be limited to 1/+18 year old to prevent/reduce speculations. Maybe 2 if we're talking about adding a holiday home(yeah. I know it's a strech).
Companies should not be alowed to own residential properties unless they are a developer. In that case, they can own the newly developed properties for up to ?5? years.