Taxpayers to help fund developer's rental deal

News Category: Industry News

A landmark deal has been struck that will deliver 555 new private rented homes by June 2012, funded by British taxpayers.
 
The Berkeley Group is the first housebuilder to commit to the Homes and Communities Agency’s private rented sector initiative.
 
In the deal, Berkeley will receive £45.6m of HCA funding – including £29m from the agency’s Kickstart programme – allowing it to build 1,778 new homes in the south of England.

Under the deal, a Private Rental Fund will be established which will purchase 555 of the homes, and these will be retained for rent on the open market.
 
In return for the funding, the HCA will have a 20% interest in the value of the Private Rental Fund.
 
Liz Peace, chief executive of the British Property Federation, which has been pressing for institutional and larger landlords to enter the sector, said: “This is excellent news and something on which the BPF has campaigned for a long time. The HCA and Berkeley deserve huge credit for finalising this deal, which will deliver new homes in areas of high demand in difficult times.
 
“This shows that the financial numbers can be made to work and that large-scale market renting can support wider housing delivery. The approach should be considered by local authorities.
 
“The private rented sector has an important role to play in meeting the nation’s housing needs. While mortgage lending remains restricted, more people are choosing to rent, and large housebuilders and institutional investors should be encouraged to meet this demand with quality homes to rent.”


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