Pension Insurance Corporation (PIC) has announced a new £54m joint venture with the Government’s housing agency, Homes England, and property developer, Muse.

The new public-private partnership between the three is aiming to deliver 3,000 low-energy affordable homes for the rental market.

PIC revealed that the new joint venture, named Habiko, would become self-funding over its 12-year lifespan and diversify the supply chain for future efficient housing developments. New homes under the agreement will be built across England in areas of “high demand” for this type of housing, PIC said, with rents set at 20% below the local market rent.

Habiko will also allow PIC to act as a steward to continue forward funding affordable homes, with the insurer ultimately owning the new developments created through its investment.

PIC CEO, Tracy Blackwell, said that meeting the UK’s affordable housing needs is a challenge best met through “effective collaboration” between Government, developers, and private investors.

“Habiko is a great example of public-private partnership, which brings forward thousands of low-carbon, low-energy affordable homes,” Blackwell commented.

“PIC has invested around £4bn in social and affordable housing to date, helping provide the secure, long-dated, inflation linked cashflows to back the pensions of its policyholders over coming decades, creating considerable social value.”

Managing director at Muse, Phil Mayall, said: “Working together with PIC and Homes England, we can bring together our collective resources and unique experience to deliver thousands of low carbon and low energy homes which, by working alongside our local partners, meet the needs of communities across the country.”

Homes England chief executive, Peter Denton, stated that attracting institutional investment to the housing sector is “critical” to building the new homes needed in the UK.

He added: “This partnership supports our partners’ objective to deliver low-carbon, low-energy, affordable homes, bringing together the technical expertise and capability of Muse with the financial capacity of one of the UK's largest pension fund insurers, cementing PIC as a significant force in delivering affordable housing.”

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