Big-name funds queue to bid for plan to stimulate the housing market

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Aviva, Legal & General and Prudential are expected to be among the big-name fund managers bidding for the Government's £1bn-plus plan to stimulate the housing market. The deadline for expressions of interest in the scheme, known as the Private Rented Sector Initiative (PRSI), is tomorrow.

Run by the Homes & Communities Agency (HCA), the PRSI would buy stock off housebuilders which would then be rented out. This would provide housebuilders with the cashflow to build more homes at a time when activity in the sector is near a historical low. Once they have expressed an interest, the funds will be shortlisted and work with the HCA to see how the scheme should operate. For example, there could be one major fund with several backers, or a series of individual funds used for particular types of housing purchases.

The property agent DTZ is advising the Government, and is also assessing bids for an £800m property investment fund owned by Aviva.