We are on the current shortlist for Build To Rent round 2 containing 30 bids that would see 9765 new rental homes being built.
EXCLUSIVE: Landlords step up for build to rent cash. Three housing associations are set to build hundreds of private rented homes under a flagship government funding programme after profit-making firms withdrew bids.
The current shortlist for Build to Rent round 2, released to Inside Housing under the Freedom of Information Act , includes bids from London housing associations Peabody, Catalyst and Southern to build 660 homes in the capital.
None of the three social landlords were included in the original shortlist, released in March , but were allocated bids after for-profit providers pulled out.
The current list contains 30 bids for projects that would see 9, 765 new rental homes built – with the lion’s share in London and the south east. The first shortlist, released in March, contained bids for 36 schemes.
The Homes and Communities Agency (HCA), which administers the scheme, said the main reason for drop outs during the £850m second round had been the availability of cheap private finance through other sources.
The first round was plagued by developers exiting to concentrate on the lucrative sales market, but the HCA said this has been less of an issue during the second round.
Kirk Howe, recoverable investment team leader at the HCA, said: ‘This is normal programme management – as bids drop out of the shortlist, we bring others forward.
‘I think the general response [to why bidders dropped out] is around what’s happened in the availability of private finance. Some of them realised they didn’t need government support.’
Howard Webb, a partner at consultancy Capita, said: ‘The supply of private finance has been very, very good and dirt cheap, so it makes sense providers may have decided to look elsewhere.’
Build to Rent offers providers a share of £1 bn of equity funding to cover the development costs of private rented schemes across two rounds.
Catalyst is bidding to build 283 homes in Ealing, Southern to build 130 on eight areas across London and the south east and Peabody to build 247 in five London boroughs.
The largest bid is for funding to support 1,332 homes to be built by house builder Crest Nicholson in 12 cities and towns, including Southampton, Bristol and Birmingham.
A spokesperson for Catalyst said the build to rent cash ‘could be a very useful funding stream for us’ but warned ‘it may prove difficult for us to use this funding in the HCA’s timescales’. Under the programme, contractors agree to complete by a date set for each scheme.