The government has hired Venn Partners to oversee a £3.5 billion loan scheme to encourage development of private rented sector homes in the UK. Venn, through subsidiary PRS Operations Ltd, will be responsible for administering the loan scheme which is designed to get greater volumes of PRS homes built.
Venn was selected after a competitive bidding process. They will be responsible for establishing and managing the scheme, which will loan cash to landlords looking to invest at least £10 million in building homes for rent. The loan will be backed by the government, but the intention is that once properties are built and let, they will be purchased by long term investors and the loan repaid. While several major investors have said they will invest in PRS property, not so many are prepared to finance development risk, preferring instead to purchase ready built and rented stock.
Paul House, head of real estate and managing partner at Venn Partners, commented: “Attracting significant institutional investment to the private rented sector, which is now England’s second largest housing tenure, is critical to underpin its further expansion, improve standards and tenant choice and help increase the supply of new, purpose built homes to help address the UK’s overall housing needs.”
“Today’s deal with Venn Partners will secure a £3.5 billion investment in delivering homes specifically for private rent to ensure a range of developers across the industry get to expand into this growing market,” said housing and planning minister Brandon Lewis. “This is an exciting and important move that will help strengthen the private rented sector so that it meets the needs of tenants well into the future.”
Should demand for the government backed loans prove strong, there is a provision to increase the amount of funds from the current £3.5 billion to £6.5 billion.