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£3.5 billion investment in rented homes

Words: Laura Edgar

Housing minister Brandon Lewis has signed an agreement designed to help unlock £3.5 billion of funding for new homes built exclusively for private rent.

The deal is with PRS Operations, created as a subsidiary of Venn Partners LLP in order to secure institutional investment in building homes specifically for private rent.

Landlords are able to secure long-term financing through a government guarantee enabled through the private rented sector-housing guarantee scheme. This will in turn increase the supply of rental properties.

The £3.5 billion worth of government-backed loans will be available to landlords who want to invest £10 million on new homes for private rent. This may be increased to £6.5 billion in the future.

PRS Operations will work to arrange the total amount of funding and then offer a series of smaller loans to eligible landlords.

Lewis said: “We’ve pulled out all the stops to get the country building since 2010, including by creating a bigger better private rented sector.

“This is an exciting and important move that will help strengthen the private rented sector so that it meets the needs of tenants well into the future. But this wouldn’t have been possible without the tough economic decisions we’ve had to make to restore confidence in our economy, and it’s this strong record that has unlocked this funding.”

Paul House, head of real estate and managing partner of Venn Partners, said: “Attracting significant institutional investment to the private rented sector, which is now England’s second largest housing tenure, is critical to underpin its further expansion, improve standards and tenant choice and help increase the supply of new, purpose built homes to help address the UK’s overall housing needs.”

The British Property Foundation supports the efforts being made by the government to establish a purpose-built private rented sector.

Ian Fletcher, director of policy (finance) at BPF, said: “This is the culmination of a lot of hard work on the part of government and the PRS Taskforce to identify a suitable private sector partner. We are pleased to see that has paid off and that the sector can now more easily benefit from the guarantee scheme the government has introduced. This is another important building block in the story of build-to-rent, and increasing housing supply through institutional investment in rented homes.”