Government injects ?45m into 2,000 private rental homes

This is the first deal to come out of the ?3bn Home Building Fund, which is intended to kick-start the development of 25,000 new homes up to 2020 and 200,000 in the longer term.

The ?400m deal will include 2,062 new homes for private rent in the three cities ? 995 in Manchester, 744 in Leeds and 323 in Birmingham.

Construction is set to start in January next year and is expected to be completed in December 2019. All planning permissions and contracts have already been agreed.

HSBC and developer Dandara Group are also providing development finance. Dandara applied for a portion of the Home Building Fund. The project also includes contracts with Galliford Try, Interserve and Sir Robert McAlpine.

Dandara Group is leading on the project with support from the Homes and Communities Agency and funding from HSBC. The developer will manage the letting and management of the properties.

The government has estimated up to 1,500 new construction jobs could be created across the three cities.

Gavin Barwell, housing and planning minister, said: ?Alongside homeownership, we?re determined to create a bigger, better private rental market to offer greater choice for tenants in a country that works for everyone.

?This is one of the largest private rental sector deals in the UK and will not only create thousands of homes for people in Birmingham, Leeds and Manchester ? it will create jobs and opportunities for many hundreds of people.?

Sir Edward Lister, chair of the Homes and Communities Agency, said: ?This massive investment, one of the largest private rented deals this year, shows our determination to get builders building and substantially grow the market in this country.

?We?re working on a number of other deals, with builders of all sizes, and we?re also using our investment and land to attract new entrants to the industry.?