The government is to ask financial institutions to put money into developing homes for rent within the next few weeks
The move is part of an attempt to kick-start the housing market in the wake of severe reductions in house prices and demand for sale property.
The Homes and Communities Agency (HCA) is to ask for expressions of interest from institutions in investing in new-build housing for rent, possibly in return for a promise to guarantee a certain rental income.
Housing starts have fallen by 60% in the last year, with less than 100,000 expected to be started in 2009, compared with the government’s annual target of 240,000.
The move, in the form of the publication of a prequalification questionnaire, was originally expected this week but has been put back. This is to ensure the announcement was not overshadowed by the Easter break, according to a source close to the process. The announcement may not now happen until after the Budget on 22 April. The source said the questionnaire would ask what incentives the HCA needed to offer to persuade institutions to invest, including rental guarantees or offers to pay for infrastructure.