Canada-based Starlight Investments has secured backing from the UK government’s National Housing Bank for its second build-to-rent fund, in one of the first transactions by the newly established vehicle as England seeks to draw more private capital into housing.
The National Housing Bank, which operates within Homes England, has joined Starlight UK Build-to-Rent Fund II as a cornerstone investor. The size of the commitment was not disclosed.
The investment will support the delivery of about 6,000 rental homes across England, including in Manchester, Liverpool, Leeds and commuter-belt markets around London, where rental supply remains tight.
For the UK government, the deal is an early test of whether the National Housing Bank can use public capital to bring more institutional investors into housing and regeneration projects.
The bank was set up to deploy flexible, government-backed capital across funds, platforms and partnerships, with the aim of accelerating housing delivery at scale.
Britain has been grappling with a chronic housing shortage, while higher borrowing costs and affordability pressures have kept more households in the rental market for longer. Policymakers are increasingly looking to pension funds, insurers, sovereign investors and asset managers to help finance new housing supply.
The transaction reflects a broader shift in housing finance, where public agencies are using cornerstone commitments and partnership structures to lower perceived risks and crowd in long-term private capital.
Starlight has been expanding in the UK residential market since 2020, focusing on build-to-rent housing in large regional cities and undersupplied commuter markets.
The Toronto-headquartered firm currently has about 4,000 homes and £1.1 billion in UK assets under management.
Globally, it owns, develops and manages more than 70,000 multi-residential suites and over 7 million square feet of commercial property, with CAD 30 billion in assets under management.
Build-to-rent has become an increasingly important part of the UK housing market as home ownership becomes less accessible for many households.
For institutional investors, the asset class offers exposure to long-term rental income backed by demand in urban markets.
Starlight said its second UK fund builds on its earlier build-to-rent strategy and will focus on professionally managed rental housing in locations close to employment, education and transit.
The company said the fund has also received commitments from a broader base of global institutional investors.
Homes England said the investment is intended to support housing delivery while helping attract private capital. Simon Century, chief executive officer of the National Housing Bank, said Starlight’s approach to development and institutional ownership of mid-market rental housing aligns with the bank’s place-based priorities.
The investment adds to the growing role of development-style finance in housing, where public capital is being used not only to fund projects directly but also to shape markets and mobilise private investment into sectors considered socially or economically important.