Housing company Rentplus has launched a new rent-to-own housing model with plans to deliver 5,000 affordable homes across England by 2020.
Plymouth City Council and Sedgemoor District Council have approved plans for the first 900 homes to be built under the new model.
Rentplus is chaired by British Land chairman John Gildersleeve and is backed by private and institutional investors.
It will work with housing associations to build new homes at affordable rents for an agreed period of five to 20 years.
At the end of their rental agreements, tenants will have the opportunity to buy their property and will receive a 10 per cent gifted deposit from Rentplus to help their mortgage application.
The company is closing the first £70m of institutional investment and plans to raise up to £700m over the next five years.
Work on the first 29 properties, of which 13 will be Rentplus homes, will begin this month at Mannamead in Plymouth.
Mr Gildersleeve said: “We have a unique opportunity to deliver an alternative solution to the country’s housing crisis while supporting the home ownership aspirations of the many thousands of people who feel locked out of the housing market.”
He added: “Tenants have the chance to realise homeownership; local authorities increase their housing supply without grant funding; and the increased work for housebuilders and developers will create jobs and help the economy.”
Rentplus was set up by Plymouth-based developer Pillar Land Securities and housing association Tamar Housing Society.