The £45m joint venture, named Habiko, aims to deliver 3,000 low-carbon, low-energy affordable homes for the rental market, unlocking institutional investment.

Phil Mayall, managing director at Muse, said: “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.”

Habiko aims to be self-financing within 12 years and is targeting affordable homes for rent, 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 affordable housing.

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.”