The Government has announced proposals for a new £200 million fund to boost the construction of new homes in the private rented sector.
The new Build to Rent Fund aims to cut the risk for developers more traditionally used to building homes for sale who are looking to branch out into building homes for private rent.
By financing the construction of rental homes until they are built, let out and managed, the fund will give developers the freedom to build homes specifically for that market with confidence.
Management companies will have the chance to invest in these new rental developments, and developers will then repay the investment from government.
However, individual propositions for funding need to be for a minimum of 100 private rented units – meaning landlords operating on a lower scale will not be eligible for any funding.
Launching the new fund, housing minister Mark Prisk, said, “A healthy rental housing market must have a broad range of choice across the board. But for it to grow and develop, we must first attract new investors. The Build to Rent Fund will support this, helping to build homes specifically for private rent and breathing new life into the sector.
“And by driving this market in house building, the fund will also help create new jobs, build the homes that families need and local people want, and support economic growth across the country.”
Mayor of London Boris Johnson said, “The private rented sector now houses a quarter of Londoners and has the potential to support the delivery of a huge number of new homes in the future. I welcome this funding and I will continue to make the case that investment in London’s housing infrastructure is one of the best ways to deliver much needed construction jobs and economic growth now, while at the same time laying the foundations for our economic growth for years to come.“
The Greater London Authority will lead on assessing the expressions of interest for sites in London. Shortlisting decisions will be made by DCLG, the Homes and Communities Agency and the Greater London Authority. The Homes and Communities Agency will undertake due diligence, contracting and monitoring.
The £200 million Build to Rent Fund is now open for bids, and the prospectus has been published on the HCA website.