The Family Building Society has funded a £10m investment in the domestic property market through the rental sector, initially in London.
It will refurbish, extend or develop older properties, such as Victorian terraced and semi-detached houses, within easy commuting distance of the City and the West End.
The first three properties have been purchased and work is now underway into modernising and upgrading the accommodation.
Mark Bogard, chief executive of the Family Building Society, said: “People are crying out for more sensible accommodation. We want to provide good quality, high standard accommodation where it is most needed.
“This move evokes the ideals of the founding fathers of the co-operative and mutual movements. We can’t solve the housing crisis on our own, but we can use our resources wisely to play a part.
“We are in this for the long-term and will offer renters longer tenancies if they would like them. Any returns that we make will be re-invested into the society and in acquiring and refurbishing solid London housing stock.
“We will refurbish or extend the properties as appropriate up to the maximum permitted under existing planning regulations. he refurbishments and extensions will be done to a high standard and the Society aims to provide a superior service in terms of maintenance and repairs.”