Build to Rent is about to kick off after Housing Minister Kris Hopkins announced a short list of projects in London, Manchester, Liverpool and Huddersfield vying for a share in a £1 billion pot of cash.
Hopkins wants to see 6,500 new homes constructed out of the fund as the first part of a plan to deliver 10,000 properties to privately rent by 2015.
Build to Rent is a program that excludes private landlords and offers cash incentives to large institutional investors to build homes.
Although Hopkins has only announced the first set of projects, building has already started on two developments in Southampton and Manchester, while another 18 are in the pipeline, mostly in London, but also in Birmingham, Durham and Liverpool.
The concern for private landlords in these areas is a sudden flood of new homes for private tenants will push down rents and force landlords to invest more in their homes to compete with newer properties.
Hopkins said: “The private rented sector offers a flexible option to millions of people looking to rent good quality homes. The Build to Rent fund will give tenants far more choice over where they live and raise the standard of the properties on offer.
“So I’m pleased that so many developers have applied for a share of our £1 billion fund, and that we are well on track to have work underway by 2015 on 10,000 new homes specifically for private rent.”
Build to Rent focuses on London and other major cities.
London Mayor Boris Johnson, said: “With a soaring population and unprecedented demand for new homes in the capital we have set the most ambitious targets to help provide the homes hard working Londoners need.
“The private rented sector has a huge part to play in this. Boosting the supply of good quality well-designed homes to rent will lead to a more balanced rental market, improved services for tenants, and helps bring forward new development, while stimulating economic growth in the capital.”