Prisk said in a statement that the aim of the funding is 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. He said the scheme would give management companies the chance to invest in the new rental developments and developers could then repay the Government investment.
The investment could be used to cover development costs such as land, construction or management costs.
The launch of the Build to Rent fund follows recommendations in the Government-commissioned Montague report into the private rented housing sector. Prisk said the scheme would "help address the varying level of quality across the nation’s private rented sector".
With the majority of private rental landlords being small-scale individual investors, the funding would aim to create a balance by stimulating the market in private rented homes for large-scale housing associations, Prisk said.
The Government will create an "expert taskforce" to increase investor awareness of the fund and to offer practical support.
“A healthy rental housing market must have a broad range of choice across the board," Prisk said. "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 housebuilding, 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,” he 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," said Mayor of London Boris Johnson. "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 Government has started the bidding process for the fund and have invited developers to submit expressions of interest.
