Landlord to sell 6,000 homes for £100 million in the biggest deal of its kind
Home Group to sell 10 per cent of stock
Home Group will sell more than 10 per cent of its properties and raise £100 million in the biggest stock rationalisation deal ever seen.
The group, which owns 52,000 homes across England, plans to sell 6,000 homes in 24 local authority areas across the midlands, Yorkshire and Bedfordshire. Between 1,200 homes and 1,500 homes will be sold in the next 12 months. The total plan dwarfs the previous largest stock rationalisation of 1,800 homes by Servite (now Viridian) in October last year.
Home said it will invest the estimated £100 million it hopes to make from the sales in building 6,000 new homes.
Mark Henderson, chief executive of Home, has this week informed staff of the move. He said it was driven by the desire to improve Home’s performance. At the moment, he said the association is not able to offer a ‘brilliant or excellent service to our customers due to our cost of service issues’.
‘Currently we are nowhere near as good as we could be. If you have 20 units in an area then there is no real incentive to be investing in anti-social behaviour prevention or other services [compared with areas where you own more homes]. There is a major transformation required. We have multiple ways of doing just one thing at the moment and that has to change.’
Mr Henderson also pledged to write to all affected tenants by the end of the year. He said: ‘We want to ask our customers about what guarantees they want as part of the process, if people are really opposed [to the sale to another landlord] we are not going to steamroller them.’
Mr Henderson said that Home will complete the building of 6,000 new homes by 2016.
A National Housing Federation report, published last month, which looked at innovative ways associations can access finance, suggested associations ‘review their asset management strategy’.
The report, entitled Evolution or revolution, said associations could consider selling vacant properties if it means releasing equity for new developments. It said: ‘If a property is worth £600,000 with vacant possession and has an outstanding debt of £100,000, does it make sense to sell it when it becomes vacant, thereby providing a potential subsidy towards new development of £500,000?’ The report said the strategy would have to be pursued carefully as associations could become ‘property speculators’.
Other recent stock rationalisations
October 2009 Servite sells all of its Merseyside properties, 1,800 homes, to nine bidders for a total of £60m
October 2009 Family Mosaic sells 200 homes in Hampton, west London, to Richmond Housing Partnership
February 2010 Origin transfers 342 homes to three associations in a deal worth £7.4m, and announces it is to sell another 290
March 2010 Riverside sells 1,200 of its 50,000 homes to Sanctuary
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