Berkeley Group is fast-tracking the development of over 1,200 new homes, after setting up a private rental fund in agreement with the Homes and Communities Agency (HCA).
The arrangement means 555 homes constructed by Berkeley over the next two years will be purchased by the fund, a wholly-owned subsidiary of the house builder, and retained for rent on the open market.
The deal represents the first private rental initiative to be completed with the HCA.
The agency is providing Kickstart equity funding in return for a 20% interest in the value of the fund, as well as supporting affordable housing through its National Affordable Housing Programme.
This combined investment will enable Berkeley to bring forward work on 10 of its developments, delivering a further 922 homes for private sale along with 299 affordable homes, in addition to the properties being retained in the Fund.
The 555 new homes in the fund will be situated in developments across London, the south east and the south west, including Kingshill in Cirencester, Royal Clarence Yard in Gosport and Kidbrooke in South East London.
The properties will be completed by June 2012.
Rob Perrins, managing director of the Berkeley Group, said: "The creation of the private rental fund with the support of the HCA is a significant innovation for the private rented sector and will provide high quality homes for open market rent across a number of our sustainable communities."
Sir Bob Kerslake, HCA chief executive, said: "This is exactly the kind of landmark deal we were looking to have associated with our Private Rental Sector Initiative. We know that more people are choosing to rent and as well as accelerating the supply of new open market and affordable homes, the creation of a bulk portfolio of homes for rent could be a blueprint for long-term investment in the private rental sector in the future."
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