Prisk said that the 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.
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.
Prisk said that demand for the fund, which was initially set at £200 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; and Crest Nicholson, who intend to bring a significant number of homes to market over many sites across the country.
Prisk said that the varied mix of developers, from brand new organisations 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.
‘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,’ said Prisk.
‘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,’ he added.
Richard Hill, deputy chief executive of the Homes and Communities Agency, described it as a ‘fantastic opportunity’ to bring about a step change in terms of meeting the growing demand for rented homes in the UK.
‘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,’ he explained.
The Mayor of London, Boris Johnson, said that with the city’s population expanding at record pace, there is a 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,’ he added.
For many of the projects not going forward at this stage, advice will be offered by the Private Rented Sector taskforce headed by Andrew Stanford who will work with bidders to support them in refining proposals for viable future investment.
‘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,’ said Stanford.
‘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,’ he added.
Nick Jopling, executive director at Grainger plc said that the growth of the private rental sector is crucial to meeting the UK’s future housing needs.
‘The decision by the Government to progress our schemes to the next stage of the application for funding under the initiative is very pleasing, and we believe reflects our unrivalled experience in the residential property market and our strong track record of delivering high quality real estate developments,’ he added.
