In response to the recommendations of the Montague report, the Build to Rent Fund was launched to stimulate new private rented housing supply and to provide opportunities for new institutional investment in the sector.
The Fund is a fully recoverable, commercial investment where Government will share risk or bridge finance to allow schemes to be built, managed and let. The investment could be used to cover development costs such as land, construction or management costs.
Once the scheme is fully let the developer will sell on its interest or re-finance and repay the loan/equity.
A second round of bids was launched in September 2013 and bidding is now closed for Rounds 1 and 2. Find out further details of Round 2.
After an overwhelming response from the sector to the Fund, which was initially set at £200m, the Chancellor increased the funding available to £1bn in the Budget 2013. The extra finance will help meet demand and deliver thousands of new extra private rented homes and large scale investment opportunities.
Round 1 was significantly oversubscribed with £1.4bn worth of bids received. Approximately £200 million has been allocated under Round 1, with £800 million to be allocated under Round 2.
Ten shortlisted bids are proceeding to contract. In addition, eight contracts have been signed:
The remaining Round 1 projects are expected to be in contract by August 2014, with all funding to be drawn down by March 2015
Round 1 bids proceeding to contract include: