Housing Minister Mark Prisk has invited bids for a share of at least £400 million to build homes specifically for private rent.
The funding is part of the successful £1 billion Build to Rent fund, which for the first time offers support for developers and investors looking to branch into the private rental market.
Mr Prisk said this new scheme, alongside up to £10 billion in government housing guarantees, will encourage people to invest in this “untapped” private rental market - offering greater choice and quality of homes for prospective tenants.
One scheme has already been given the green light, with work already started on that site.
In July, the first Build to Rent deal was signed, which will lead to hundreds of new homes being built specifically for rent as part of Southampton’s Centenary Quay development.
Choice and flexibility
Mr Prisk said the government wanted to offer more choice and flexibility to private sector tenants, and the best bids for the Build to Rent fund should support longer-term tenancies as part of the mix of accommodation being provided under the scheme.
Housing Minister Mark Prisk said:
The housing market is turning the corner, with starts up a third compared to last year, and over 25,000 households helped into home ownership since 2010.
But I want to go further, which is why I’m inviting bids for a share of up to half a billion pounds to help build a bigger, better private rented sector.
This funding, combined with up to £10 billion in our housing guarantees schemes, will help build on successes like Centenary Quay in Southampton to offer greater choice and quality for tenants across the country.
Getting Britain building
The Build to Rent fund is one of a number of government-backed measures designed to get Britain building across the housing market.
Already, this range of government action is yielding results, including:
334,000 new homes built in England over the past 3 years - putting new housing supply at its highest level since 2008
over 150,000 new affordable homes built over the past 3 years thanks to the wide range of affordable housing programmes - with more funding expected to help bring about the fastest rate of affordable housebuilding for two decades
The Mayor of London, Boris Johnson, said:
With around a quarter of Londoners living in private rented accommodation, demand in this sector has the potential to support the construction of tens of thousands of the new homes the capital desperately needs.
By releasing land and working with institutional investors we are working hard to accelerate delivery in the purpose built private rented sector.
I welcome this fund which will not only provide more homes for working Londoners, but also deliver much needed construction jobs and will underpin this city’s future economic growth.
Chairman of the Private Rented Sector taskforce Andrew Stanford said:
There is considerable momentum building in the new Private Rented Sector. The second round of Build To Rent funding will be a further significant boost to kick-starting the sector. The taskforce is here to help bring partners together throughout this phase of funding. Do get in touch if we can help.
Chief Executive of the Homes and Communities Agency, Andy Rose, said:
The private rented sector has a key role to play in increasing the supply of new homes. There was strong appetite the first time round and we are looking forward to seeing an even higher level of interest and quality of proposition this time.
The minister was speaking at RESI 2013, where over 1,000 investors in the residential property market gathered to discuss forthcoming opportunities.
The prospectus for the second round of Build to Rent funding is published today by the Homes and Communities Agency.
The first Build to Rent deal was signed in July 2013.
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.
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