Shares in Sigma Capital, the urban regeneration investor, jumped by over 10 per cent after it announced a 50 per cent expansion of its venture with Gatehouse Bank.

The Edinburgh boutique created by Graham Barnet and the Shariah-compliant investment bank have set a new target of 10,000 new private rented sector homes to create a £1billion portfolio over the next five years. The venture was first unveiled 18 months ago with a promise of £700m of investment for 6,600 new homes.

Sigma said the new agreement "reflects both the initial success of the first phase...and the confidence of both parties in market demand".

The first phase is already under way, targeting 927 new homes across 14 sites in Greater Manchester and Merseyside with a total development cost of around £106m. Sigma said it was currently ahead of schedule with a quarter of the units already built or under construction. "The new arrangement allows Sigma to plan the geographic expansion of the portfolio systematically and to deliver the subsequent phases more quickly and efficiently."

Mr Barnet said: "Gatehouse has led the way as a funder in the PRS space and this acceleration and expansion of our activities with them is evidence of the quality and success of our initial phase and the delivery platform we have built with Countryside Properties and Direct Lettings."

The AIM-listed shares rose 7.5p to 77.5p, valuing Sigma at £48m.