A group of councils in the North are to build 1,000 homes for private rental use on local authority-owned land, and will bid to use £6m of central government ‘build to rent’ funding.
The Sheffield City Region Local Enterprise Partnership will use South Yorkshire Housing Association as its partner to develop, rent out and manage the first tranche of 150 homes, which are due to be completed by 2015.
The scheme is one of the first examples of a housing association taking up a management role of private rented developments as proposed in last year’s Montague Review, which promoted the idea of build-to-rent schemes.
The consortium of five councils will match central government funds with £6m of its own, but will look to have the equity refinanced by an institutional investor in the next three to five years.
Tony Stacey, chief executive of South Yorkshire Housing Association, said: “We have to get this up and running first. Investors don’t want to take the development risk, but by that stage they will have a good feel for what the void rates and rent levels are. The cash flow will be there to see.”
Leeds city region is considering a similar model, which could involve investment from the West Yorkshire Pension Fund.
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