The Homes and Communities Agency (HCA) anticipates significant fundraising activity to be undertaken in the first quarter of 2010 by lead consortia in its Private Rental Sector Initiative.

The HCA is in active discussion with four front-running consortia and expects this to lead to new funds, in the region of £1 billion, channelled to the private rental sector in 2010. Such a move could be the first step towards private rental being established as an investment class in its own right, as well as providing a cash boost for house builders and more choice for consumers.

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The announcement follows the Pre-Budget Report last week in which the government indicated its intention to build on the Agency’s PRSI by consulting on the contribution the private rental sector could make to housing supply, and to identify any existing barriers to investment.

Sir Bob Kerslake, Chief Executive of the HCA, said: "I am pleased that the Chancellor acknowledged the level of interest in our initiative last week, which adds to the good progress we are making. Over half of the bids we received under Round 2 of our Kickstart Programme expressed an interest in hearing from prospective private rental funds and in addition we hope to see the front-running consortia cross the line sometime in the new year. I believe we are close to seeing some tangible success."

The HCA is continuing to work with several other consortia which are not quite as far advanced with their proposals, as well as large housing associations which are focused on opportunities for both market and affordable rent.

(CD/KMcA)