Government agrees £3.5bn deal to fund new private rented sector homes

Out-Law News | 12 Dec 2014 | 4:49 pm | 1 min. read

The UK government has agreed a deal with a subsidiary of asset management firm Venn Partners (VP) that it says will provide £3.5 billion in funding for the construction of homes for the private rented sector (PRS).

According to a statement released this week, the government has signed a deal with VP subsidiary PRS Operations Ltd (PRSO). Under the agreement PRSO will arrange up to £3.5bn of funding, which will then be offered as government-backed loans to landlords seeking to build homes for private rental.

The statement said that landlords must be looking to invest a minimum of £10 million in PRS homes in order to be eligible to receive a loan.

"We’ve pulled out all the stops to get the country building since 2010, including by creating a bigger better private rented sector," said housing and planning minister Brandon Lewis in a statement. "Today’s deal with Venn Partners will secure a £3.5bn investment in delivering homes specifically for private rent to ensure a range of developers across the industry get to expand into this growing market."

News of the deal was welcomed by real estate investors' trade body the British Property Federation (BPF). Ian Fletcher, BPF director of real estate policy, said: “This is the culmination of a lot of hard work on the part of [the] 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," said Fletcher.  "This is another important building block in the story of build-to-rent, and increasing housing supply through institutional investment in rented homes.”