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Private Rental Sector Initiative

Large scale institutional investment in private rental housing could provide a source of new funding for the housing sector and could provide greater choice for consumers.

The HCA launched its Private Rental Sector Initiative (PRSI) in order to encourage more institutional investors to take an interest in the residential housing market, with a specific focus on encouraging those investors who would commission and purchase new-build housing.  We signed the first deal for new rented homes with the Berkeley Group last year using the Agency’s Kickstart programme to provide support.  A number of institutional investors, including Aviva, are continuing to look toward the creation of residential investment funds.

The objectives of our PRSI are to: 

  • Establish an attractive financial opportunity for investors and to attract new sources of private sector funding to the housing development sector
  • Help to stimulate housing supply and meet demand for rental property in the face of a shrinking mortgage market, especially for first-time buyers
  • Provide housebuilders with an opportunity to pre-sell stock, helping to reduce the speculative nature of house building and attract more volume in development
  • To help stimulate fundamental change in the housing market in the longer-term, making private rental more of a tenure of choice and offering a broader range of options to consumers.

Expressions of interest in our Initiative were received from household name UK pension funds and other investors, property developers, fund managers, housing associations and property managers. The HCA worked collaboratively with the British Property Federation to encourage further debate on the role of private rental investment in the UK property sector.  We have also run workshops with housebuilders and the Home Builders Federation on the future for the PRS market.

Since launching PRSI, we have encouraged organisations to work together in developing propositions of scale; and have used our links with private developers to identify a potential pipeline of housing schemes ripe for investment. The first deal – to deliver 555 new rental homes – was signed with the Berkeley Group in August 2010 and a number of other developers and investors are currently working together to establish funds. 

PRSI has ceased as an HCA initiative but we are now supporting local authorities to bring forward private rental funds within their areas and are helping broker relations between public land owners and private rental investors. Our brokerage role has helped the ODA with its marketing of the Olympic Village to investors. 

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