Monday, May 4, 2009

£500m private housing fund to kickstart housebuilding sector

A  ВЈ500m  investment fund to buy up and build hundreds of new homes for private rental is on the cards.

The Government’s housing and regeneration arm, the Homes and Communities Agency, is looking for private investors to put up an initial investment of ВЈ500m. This would be used to buy up stalled housing schemes and to commission new housing schemes aimed at the private rental sector.

The HCA’s Private Rented Sector Initiative (PRSI) wants to broker the creation of a U.K property investment market for private rental, modelled on similar markets in Australia and the U.S. It is aimed at pension funds and overseas property investors looking for long term stable investment vehicles.


£500m private housing fund to kickstart housebuilding sector


Funders would recoup their investment through rental returns and potentially through rising property prices over the long term.
Sir Bob Kerslake, HCA chief executive, said he believed the time was right to work up the initiative with the market. He said: "“To date, achieving scale has been one of the main barriers to attracting institutional investors into the housing sector.

"We believe there is an opportunity now for the HCA to work with developers and housebuilders to offer a pipeline of projects for the PRSI, which could result in a positive outcome for all stakeholders.”

The HCA is hoping to broker the creation of the property investment fund with an intial capitalisation value of ВЈ500m by June.