Capital Letters, a company owned by London councils, has secured its first investment partner in a £1.5bn PRS strategy.
The group has struck a deal with fund manager QSix to buy properties on behalf of the group, which would take the role of landlord, letting a mix of social, mid-market and private rentals.
Capital Letters is in advanced negotiations with other private investors to expand the portfolio to 4,000 homes over the next four years.
Following investment, the partnership aims to begin buying properties in 2022.
Capital Letters was set up in 2019 with a strategy to boost affordable housing, to allow families to move out of temporary accommodation and avoid homelessness. This would see councils secure savings as they avoid paying expensive B&B fees.
The new investment model will see the group develop through a mixture of public and private partnerships. The income derived as a landlord will allow Capital Letters to become self-financing in the long-term, after initial start-up funding from the government.
Sue Coulson, chief executive of Capital Letters, said: “By combining their future demand through Capital Letters, our member councils have created a single, simplified investment vehicle that will help to tackle the homelessness crisis head-on.”
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