Homes England has announced a £54m joint venture with the private sector to build 3,000 low-carbon, affordable rental homes.
The deal was signed with infrastructure investor Pension Insurance Corporation and development company Muse, creating a new venture called Habico. 
The 12-year partnership plans to build tenant homes “for people whose needs are not met by the market, with rents set at 20% below local market rents,” according to the government's Housing and Regeneration Agency. That's what it means.
It added that the Pension Insurance Corporation would “ultimately own the homes and locations that it helped build through its investments” and would have the ability to continue funding other projects.
The companies added that the homes being built in the UK will be in easily accessible locations, close to employment and designed to help residents save on energy bills.
Tracy Blackwell, CEO of Pension Insurance Corporation, said: “Meeting the UK’s affordable housing needs is a challenge best solved through effective collaboration between government, developers and private investors.
“The Pension Insurance Corporation has invested around £4 billion in social and affordable housing to date, helping to provide secure, long-term, inflation-linked cash flows to underpin policyholder pensions for decades to come. and create tremendous social value.”
Peter Denton, chief executive of Homes England, said: “Attracting institutional investment into the housing sector is vital if we are to build the new homes the country needs.
“This partnership supports the partners’ goals of delivering low carbon, low energy and affordable housing, and combines Muse’s technical expertise and capabilities with the financial capabilities of one of the UK’s largest pension fund insurers. Together, we will solidify Pension Insurance Corporation as an important company with the power to provide affordable housing.”
The move is part of the government's wider drive to build 1.5 million homes over the next five years, with social housing planned to be a bigger part of this. In the past five years, the country has built about 1 million housing units.
In last week's Budget, Chancellor of the Exchequer Rachel Reeves announced a £3bn package for small businesses and the build-to-rent sector, which would give them access to cheaper investment capital.
Tom Bill, head of UK housing research at Knight Frank, said the measures were “a key element of expanding housing supply and improving delivery rates by embracing diverse tenures and supporting more players in the market”. “This sends a clear signal that the government recognizes that this is the case.”
