Pension funds Aviva and Legal & General are set to invest in private rented housing.
Both investment giants have confirmed that they are in talks with Government about funding construction blocks of affordable housing, according to a report in The Times.
Legal & General that it was still discussing funding with the Homes and Communities Agency before it put together a proposal.
Legal & General Investment Management’s Bill Hughes told The Times: “The strategic case is strong and has been strong for some time. Pricing in residential is particularly attractive. However, there are limitations, such as we don’t think the blocks can be more than 60 to 100 units.”
Meanwhile Aviva has submitted plans to build rental homes in the South East to the government along with CB Richard Ellis and a US property manager.
An HCA spokesman said the association anticipated more investors “going public” in the coming months.
HCA chief executive Sir Bob Kerslake said: “This is part of the answer to the housing crisis. Aviva are the kind of big institutional investor we have been aiming to bring into the private rented sector. The consortium is one of a number of strong responses we have had to our expressions of interest process.”