Pension Insurance Corporation, Muse and Homes England have formed a £54m joint venture, named HABIKO, to bring forward 3,000 low-carbon, affordable homes for the rental market

Habiko will become self-funding over its 12-year lifespan and aims to diversify the supply chain for future efficient housing developments.

It is targeting up to 100% affordable homes for rent for those whose needs are not met by the market, with rents set at 20% below the local market rent.

During the 12-year lifespan of the partnership, PIC will have the ability to continue to forward fund the development of the affordable homes and will ultimately own the homes and places they have helped to create through its investment and long-term stewardship approach.

The homes will be built across England in areas of high demand for this type of housing.

The developments aim to create social value for these communities, including boosting the local economy through job creation and new skills to drive green innovation.

The homes will be in accessible locations, close to employment opportunities and be designed to help residents save money on their energy bills.

Tracy Blackwell, CEO of PIC, said: “Meeting the UK’s affordable housing needs is a challenge that is 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.

“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.”

Phil Mayall, managing director at Muse, added: “The government has set out a bold and ambitious challenge to deliver a significant number of new affordable homes over the next five years.

“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.”