(Reuters) - British insurer Aviva Plc could buy thousands of homes in London and the southeast of England to use as rented properties in a deal with social housing provider A2Dominion, the Financial Times reported on Sunday, citing people familiar with the situation.
The two companies, which are in advanced negotiations, plan to launch a special purpose vehicle that would build a mix of social and open market rented houses, the FT said on its website.
Insurers and pension funds are poised to spend 7 billion pounds ($11 billion) on rental homes in Britain in a bet that a shortage of housing and mortgages produces a generation of renters rather than owners.
Larger rival Prudential Plc's said last month it would buy more than 500 private rental units from Berkeley Group for 105.4 million pounds.
A2Dominion is one of Britain's largest social housing providers, owning 34,000 houses in and around London, according to the FT.
(Reporting by Abhirup Roy in Bangalore; Editing by Marguerita Choy)