UK pension scheme Nest is working with the finance giant Legal & General to invest up to a billion pounds into Build to Rent schemes.

At first the two sources will combine to put some £350m of investment into BTR, extending existing L&G initiatives.

A statement says: “With locations already lined up, all new rental schemes will be targeting net zero in operation by 2030 and will be built on brownfield sites in city centres.”

A spokesperson for Nest says: “We’ve been carefully considering the UK market and where best to invest so that we can help boost our members’ pensions and support economic growth.

“We can see there’s a critical shortage of housing supply, coupled with increasing demand for high quality rental homes. By building more properties, we can extend to our members a great investment opportunity while helping to meet this demand and bolster the rental market.

“After working with L&G for many years, we’re delighted to extend our partnership into this new area. L&G and [asset management service] PGGM have already been successfully investing in UK Build to Rent sites, giving us confidence that this is a tried and tested approach we’ll now be extending to Nest members.

“This is a great deal for our 13 million members and the UK. By also drawing in international investment from PGGM, we’re amplifying our impact and providing much needed residential properties across the UK.”

L&G and PGGM have been investing together in UK Build To Rent schemes through a joint venture called the Access Development Partnership.

Since 2016, L&G has deployed over £3 billion of capital into the Build To Rent sector, delivering more than 10,000 rental homes – forming a key part of its growing residential platform, one of the largest and most diverse in the UK.

The past and current governments have called on the UK defined contribution pension industry to boost investment in UK assets to aid UK economic growth.