The minister announced the first 45 projects to be taken forward using the £1 billion (approx. €1.17 billion) Build to Rent Fund. Mr Prisk said that the innovative new projects, a quarter of which are for London, will be the first step toward creating a more balanced rental market, driven by quality instead of demand.
Driving investment in the rented sector
The Build to Rent Fund is designed to help developers invest in homes built specifically for private rent by reducing the up-front risk in a relatively untested market.
Mr Prisk said that demand for the fund, which was initially set at £200 million (approx. €233 million), was so overwhelming that the Chancellor increased the cash on offer to £1 billion in the Budget last month.
A first round of 45 projects will now proceed to a competitive clarification and due diligence process, to receive a share of £700 million, with a second round of bids for the remaining fund expected to open later this year.
Projects going forward in this round have the potential, subject to due diligence, to deliver between 8,000 and 10,000 homes, and include:
Genesis Housing Association, with plans for new rental homes around London Place First, along with Together Housing Group, who will be building across Northern England Crest Nicholson, who intend to bring a significant number of homes to market over many sites across the country Mr Prisk said that the varied mix of developers, from brand new organizations and small housing providers to long-established developers, will bring new blood into a market currently dominated by small-scale buy-to-let landlords, and will help to give tenants more choice when choosing a home in the future.
Housing Minister Mark Prisk said: “This government is determined to get Britain building, and the Build to Rent Fund is set to help us deliver, with up to 10,000 new homes to be built from these projects.”
“We’ve seen overwhelming demand for the fund, and it’s become clear that there’s a real appetite for rental investment. We want to support that, which is why we’ve made a £1 billion Budget boost to the fund.”
“Now, these new projects will help us map this almost uncharted market, bringing in new blood to improve rental quality and choice, and building the new homes that this country wants and needs.”
Richard Hill, Deputy Chief Executive of the Homes and Communities Agency, said: “The £1 billion Build to Rent fund presents a fantastic opportunity to bring about a step change in the way we meet the growing demand for rented homes in this country, while the incredible initial response to the fund clearly shows that builders are ready to take up that challenge. Our role is to ensure that the right schemes are supported in the right places, allowing quality and well-managed homes to come forward quickly to meet local demand.”
The Mayor of London, Boris Johnson, said: “With London’s population expanding at record pace, we need to build around a million new homes in the next 25 years to meet demand and avert a possible housing crisis. Increasing supply in the private rented sector has a massive part to play in this. Building new well-designed homes to rent will also lead to a more balanced rental market for Londoners, as well as providing construction jobs and stimulating growth for London’s economy by making it an even better place to live and work in.”
Dedicated support for the private rented sector
The minister also confirmed the full membership of the expert Private Rented Sector Taskforce, headed by Andrew Stanford. For many of the projects not going forward at this stage, advice will be offered by the taskforce who will work with bidders to support them in refining proposals for viable future investment. The team members who join the department this month include:
Julian D’Arcy of Kirkby Capital, a former regional chairman and proprietary partner at Knight Frank Joanna Embling, a property consultant and chartered surveyor, specializing in urban redevelopment and a former equity partner at Cushman Wakefield Tracey Hartley, a specialist asset manager for large scale residential landlord Grainger plc Dominic Martin, senior analyst at EC Harris and a qualified surveyor Andrew Stanford said: “I very much look forward to working with this dynamic and highly experienced group of residential property specialists, all of whom share a passion for the private rented sector and a detailed understanding of how to make it a success.”
“I have every confidence that by working closely with partners and our colleagues at the Department for Communities and Local Government, the taskforce will achieve its objective of expanding the sector and housing supply.”
Further information The Build to Rent Fund has been developed to support purpose built, private rented demonstration schemes across England which have the potential to attract investors.
The fund is being administered by the Homes and Communities Agency, which is the single, national housing and regeneration delivery agency for England and the Regulator of Social Housing Providers.
The Greater London Authority, led by the Mayor of London, Boris Johnson, is leading on the assessment of London bids.
Bids are moderated jointly between the Department for Communities and Local Government, the Homes and Communities Agency and the Greater London Authority against the criteria detailed in the prospectus and agreed at the Decision Panel chaired by the department.
Successful projects were chosen with deliverability, value for money, local housing demand and a clear exit strategy prioritized.