The £40m Hughes House project on London Road will be the first advanced by the BMO UK Housing Fund, a venture by housing association Home Group and BMO Real Estate Partners.
The fund has been established to accelerate the delivery of purpose-built affordable private rent homes for key workers UK-wide.
Once complete, the 258-unit scheme will comprise 144 one-bedroom apartments, 99 two-bedroom apartments and 15 studio apartments. Home Group bought the site from its previous owner for an undisclosed sum.
Home Group, a North East-based organisation responsible for 55,000 properties, said it has devised a flexible rent model for the fund, adaptable to suit the build location, as well as the varying needs of renters.
Kitson Keen, head of build to rent at Home Group, said: “We are continually looking at new ways of working in order to disrupt the housing market.
“As a country, we aren’t going to be able to build the homes we need without innovative approaches. A larger, professionally managed Private Rented Sector will have a positive impact in driving up standards.
“The Hughes House development is the first in what we expect to be many more similar developments to emerge across the UK.”
Consent was secured in August 2020 for the demolition of Hughes Hosue and its replacement by 258 apartments, the scheme also including basement parking and a ground floor retail unit.
A previous proposal for 245 apartments had been put forward in 2019, but was withdrawn.
The two organisations have combined to seed the fund. With offices in London, Paris and Munich, BMO Real Estate Partners has assets under management of €7.1bn.
Fund manager Peter Lowe said: “This acquisition provides us with an opportunity to support the delivery of much needed housing in Liverpool, a market which has been characterised by an undersupply of affordable private rented accommodation.
“The location of the scheme will enable us to meet the weight of demand in the area from key workers working within the local authority, hospital, and both universities in low- and middle-income roles.”
One of BMO UK Housing Fund’s largest investors is social impact investment vehicle Big Society Capital.
The firm’s investment director Wren Laing said: “An essential part of solving the housing crisis is tackling the problems experienced by tenants and improving the quality and range of choice of housing options available to people living in the PRS.
“The Flexible Rent model has the potential to contribute to this through the delivery of new professionally managed affordable rental homes, expanding the current build to rent offering to a wider market.”