A new Build to Rent partnership has been announced between Legal & General Capital (LGC) and Dutch pension fund manager PGGM.

It is understood the union will invest £600 million into developing private rental housing across the UK, providing over 3,000 homes.

Paul Stanworth, MD of LGC, said: "The UK rental market, compared to the US and Europe, is dysfunctional, with ever increasing rents and increasingly poor accommodation. For this to change, and renting to become more affordable, we need to invest in the 'new', and build new homes to rent, and just stop inflating the prices of old housing stock."

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The developments will help urban regeneration while incorporating modern green design and infrastructure.

A total of 650 homes will be built through three Build to Rent development schemes in Bristol, Salford and Walthamstow.

LGC said the partnership is currently in 'detailed discussions' on the acquisition of numerous sites, all situated in urban locations where there is strong demand.

Mathieu Elshout, Investment Director Real Estate at PGGM, said: "This partnership not only addresses the supply/demand imbalance, it also aims to improve the UK's built environment; acting as a catalyst for wider urban regeneration and creating rental stock in sustainable urban schemes centred around key transport hubs."

(LM/CD)