House-builder teams up with Gov't agency to boost rented accommodation

6 September 2010 0:00 am | Updated: 6 September 2010 10:39 am | By Paul Thomas

House-builder The Berkeley Group has teamed up with the Homes and Communities Agency to provide around 555 new homes for the private rented sector by June 2012.

The agreement sees the establishment of a private rented fund, which will buy and allocate 555 homes for the rental market over the next two years.

The HCA is providing equity funding to Berkeley for a 20 per cent interest in the value of the fund. Berkeley will receive £45.6m of HCA funding allowing it to build 1,778 new homes in the south of England, with around a third to be retained for rental under the agreement.

HCA chief executive Sir Bob Kerslake says: “This is exactly the kind of landmark deal we were looking to have associated with our private rental sector initiative.  We know that more people are choosing to rent and as well as accelerating the supply of new open market and affordable homes, the creation of a bulk portfolio of homes for rent could be a blueprint for long-term investment in the private rental sector in the future.”

The British Property Federation has welcomed the deal, which is the first private rental initiative to be completed with the HCA.

BPF chief executive Liz Peace says: “This is excellent news and something upon 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, alongside similar innovative approaches such as that used in Birmingham, as potential housing delivery models to explore.”

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