Government launches £200m housing fund

The government has launched a competition for developers to apply for £200m to accelerate the development of large housing schemes for the private rental market.

The competition, which will be open to schemes of at least 100 units, will be run by the Greater London Authority in the capital and the Homes and Communities Agency (HCA) elsewhere in the country.

Developers will have to submit bids for the fund against a prospectus published today, with the HCA saying the money could be used to cover development costs including land, construction or management costs. Funding will come in the form or either equity or loan finance, depending on the bid.

The creation of the ‘Build to Rent’ fund was announced by communities secretary Eric Pickles in September, following on from the publication of the Montague report into the private rented sector, which was aimed at finding ways to attract new money into the sector from institutional investors. Details of the competition were finally published today, with the government now open to receive bids.

Housing minister Mark Prisk said: “For [a healthy rental housing market] 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.”

HCA chief executive Pat Ritchie said: “This programme will increase and accelerate the building of quality and well-managed private rented homes, as well as encouraging long-term institutional investors to the sector which will in turn unlock greater capacity in the housing market.”

The government did not say how many homes it expected to be able to support with the funding. Interested developers have until noon on February 4 2013 to submit their bids.