The bidding round for a £400m pot forms part of the £1bn Build-to-Rent fund to support for developers and investors looking to branch into the private rental market.

Prisk said this new scheme, alongside up to £10bn in government housing guarantees, will encourage new investors into the “untapped” private rental market.

The Government aims to fund up to 10,000 new homes for private rent by 2015.

Run as a national competition, bidders are being invited to submit expressions of interest, including core information about their propositions by the end of October.

In July, the first Build-to-Rent deal was signed from Round One bidding for hundreds of new homes for rent as part of Crest Nicholson’s Centenary Quay development in Southampton where building work has started.

A further 42 proposals are currently being assessed from Round One shortlisted submissions.

Prisk said: “The housing market is turning the corner, with starts up a third compared to last year, and over 25,000 households helped into home ownership since 2010.

“But I want to go further, which is why I’m inviting bids for a share of up to half a billion pounds to help build a bigger, better private rented sector.

“This funding, combined with up to £10bn in our housing guarantees schemes, will help build on successes like Centenary Quay in Southampton to offer greater choice and quality for tenants across the country.

Chairman of the Private Rented Sector taskforce Andrew Stanford said: “There is considerable momentum building in the new private rented sector.

“The second round of Build-To-Rent funding will be a further significant boost to kick-starting the sector. The taskforce is here to help bring partners together throughout this phase of funding. Do get in touch if we can help.

The Taskforce can be contacted at [email protected].

Round 2 prospectus

Investment proposal template