The Homes and Communities Agency (HCA) announced that an initiative which could see hundreds of millions of pounds worth of new investment into the private rented housing sector has received 64 expressions of interest.
The HCA's Private Rental Sector Initiative (PRSI) is designed to attract institutional investors, such as UK pension and overseas funds that have not traditionally been involved in residential letting, into the market at scale for the first time.
Used to fund the building of new homes specifically for private rent, it could help relieve pressure on the housing market by kickstarting stalled developments, as well as make private rental an option of choice for consumers in the future.
Submissions to the expression of interest process, launched by the HCA last month, have been received from household name UK pension funds and other investors, property developers, fund managers, housing associations and property managers.
The HCA and its advisor DTZ are now evaluating the submissions with a view to encouraging organisations to come together to create investment propositions with scale.
Of the submissions received, several strongly meet the HCA core brief, focusing on the capital (investment and fund management) elements of the initiative. The remainder relate to two other relevant components:
Several of the submissions received were from consortia, and a number were from overseas institutions.
The HCA and DTZ will now evaluate the submissions based on the outlined approach, including deliverability and value for money, and each organisation's:
The HCA and its advisors will continue to work with each of the submitting organisations in coming weeks and it is anticipated that many may need to work together, particularly where their submissions are well aligned, to create a focused number of propositions at scale. Given the scale of the interest, there may be a number of funds and more than one fund partner.
The HCA has also confirmed that it has begun an exercise to indentify a potential pipeline of stalled housing schemes ripe for investment. It is also envisaged that there may be some cross-over in terms of identifying potential product for the PRSI, with the Agency's related initiative to kickstart developments using £400 million of additional public money announced in the Budget.
