Friday, 19 December 2014

Ten associations awarded a share of £700m government pot to build private rented homes

Landlords take private rent plunge

New government funding for private rented homes has prompted a host of housing associations to rapidly expand their market rent portfolios.

Fifteen housing associations have now stepped up to answer the coalition’s call for large-scale private rented development, with a host of others mulling plans.

This week, 10 associations, including four members of the G15 group of large London landlords, were among the developers to share in a £700 million government pot designed to accelerate the delivery of private rented sector housing.

It has also emerged that Guinness Partnership and Catalyst Housing each intend to build 1,000 PRS homes over the next three and five years respectively, using their own funds rather than government cash.

The government’s build to rent fund, which will grow to £1 billion following a second bidding round later this year, will deliver as many as 10,000 new homes.

Notting Hill Housing Trust, which expects to receive £33.1 million from the fund, has plans to quadruple its 500-home PRS portfolio within five years. The 25,000-home landlord will build an additional 2,000 homes over five years, including 423 financed by the government.

John Hughes, development director at Notting Hill, said: ‘It’s a good area to invest in, both in terms of servicing a client group and as a commercial investment.’

Network Housing Group, which would not disclose how much build to rent funding it expects to receive, aims to build its PRS portfolio to 500 homes over the coming years.

David Levenson, finance director at Network, said: ‘It’s the mixed approach that can help solve London’s housing problem.’

In the north of England, Together Housing Group expects to receive £17 million through its joint bid with developer Placefirst. The joint venture will build 600 homes for private rent.

Tom Miskell, chief executive of THG which manages around 1,000 leasehold properties, said: ‘There’s obviously a limit on what you can provide in terms of subsidised housing, and this is helping to meet housing need one way or another.’

The shift follows the leads of London & Quadrant, Thames Valley Housing and Places for People which revealed plans to expand into the sector last year using their own balance sheet and, the case of TVH, institutional investment.

Readers' comments (28)

  • Where's the social housing?

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  • Good news and hope that those H.A's who can take it up do as so many young people are in work and will not qualify ever for social housing and renting in the normal private sector is so insecure and too many unscrupulous landlords. In the beginning when the new towns were being built those in work were first in. Work gives incentives and housing should not be given willy nilly to those who have never contributed e.g. young women who get pregnant time after time just to get housed! There are exceptions for those who unfortunately are not able to work for health reasons/disabilities/really vulnerable young adults AND of course there are also those who genuinley have tried and tried to find work but of course as we know WHERE ARE THE JOBS in so many parts of the country. BUT this is good news.

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  • Why is my tax being used to fund private enterprise. This lot scream about not being able fund social projects and then spend the best part of three quarters of a billion pounds funding the private housing market. Quite frankly this is a disgrace and the country didn't vote for this type of policy at the last election. Roll on the next election, maybe we'll see a lilttle more real democracy next time and none of this coalition nonsense where manifestos can be torn up - the thing that grates with me is that if I was seen to have lied at a job interview I would be sacked if I couldn't deliver what I said I would, however with our politicians it seems to be the norm to just lie and have no come backs. People will lose faith in the system if this garbage continues.

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  • Man Withabacus

    Did anyone see yesterdays Evening Standard headline?

    "Rents Rise 8 Times Faster than Wages - Young Working Londoners Hit"

    According to the article the Average Monthly Rent in London is £1,106 having risen by 7.9% in a year and currently the highest ever recorded.

    I suspect that this is the reason for so much interest.

    Massively increasing supply should push rents down but I suspect that the 'great and the good' have not factored in lower rents into their funding plans and business appraisals...

    Before, tax payer cash and government support is pumped into private rents perhaps the HCA should investigate whether this is actually in the public good or just an opportunity for savvy HAs to exploit hard working people.

    An easy solution would be to cap private rents supported by tax payer cash or government guarantees to 60% of market rents.

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  • Norman Froggatt

    Leeder: This government money is going to Housing Associations which are 'not for profit' organisations who cannot be described as private enterprises, they have no shareholders and are deemed charities. As for broken manifesto promises just read
    Search Results Iain Dale's Diary: Labour's 27 Broken Manifesto Promises iaindale.blogspot.com/.../labours-27-broken-manifesto-promises.htmlCached -

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  • This is part of wider thrust to make high cost, insecure privately rented accommodation the norm again for the majority of households. That is of a piece with zero hours work contracts, the demise of decent pensions for the majority and the end since April 1st of a right to healthcare. An insecure, frightened population is compliant and servile - which is what fuedal capitalism requires of us. As Oliver Letwin said of public sector workers, the way to manage is through: "fear and discipline". And that is how Call-me-Dave, Tax-me-not George and Demento-Smith see the way Britain should be governed. Touch that forelock - your landlord is coming to visit.

    Just because in some cases the landlords will have their roots in housing associations, doesn't mean that rents will be affordable or that tenures will be secure. Witness the alarming alacrity with which all too many housing associations introduced insecure 'flexible' five year tenancies.

    Too many housing associations now see themselves now as businessess, there to make profits. There is everything to be said for making a surplus or being efficient - that is the way to provide a serv ice to the community and individuals. There is lot to be said against doing that simply to reward a small coterie of shareholders and top managers.

    There is hankering to break free of the 'social landlord' baggage, I suspect in many a CEOs office and list on the Stock Market. Bonuses, share options, sycophantic write ups in the Sunset Times - sure beats the tedium of having to go through the motions of 'putting people first'... THis government initative is all a part of that.

    FInally, this housing subsidy could be more usefully and sensibly used to build social housing of a type that did so much good after the war or to help individuals use their housing payments to buy a home of their own.

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  • I think a lot of people will be surprised to hear that Housing Associations don’t really like social tenants and would prefer middle class working people not on housing benefit, in reality people who make little or no problems. In the new world order Social Housing is dead.

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  • I live in an HA flat, in a purpose built social housing estate. We have a number of flats now rented out at market rate, so even fewer flats are available for social rents.

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  • they just like a bunch of sheep its a new
    thing and i whant to play or this consultant
    has come with this idea we must be on the
    band waggon or we will miss the boat, no
    thought about the long term only my next
    pay round and how are they going to rais
    the money, yet an other charge on property
    the group do not own where is the governance
    are the boards asleep as useual?

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  • I think this is a good idea, building social housing alone will not solve the shortfall of accomadation. Social Housing is over subscribed and the undenyable fact is that there is a vast section of society that would not qualify for a property due to need based allocations policies (quite rightly i believe). There is also a large section of society who choose to rent privately, enjoying the flexibility that provides, the biggest issue with private renting is poor standards of both property and service, high charges by agents and instability as the landlord could choose to sell at any time.

    HA's can remove many of these issues in the PSL, providing good service, lower fees and stability as the likelohood of sale is minimal. Many RSL's already have leasehold management teams set up to look after the sales side of the business so this would not take away from the management services provided to the social residents. It would also be a method of cross subsidy to allow the funding of increased numbers of social properties, for which the grant rate has been cut yet further.

    There is no reason that the PRS sector can not be a sector of choice for people if the key concerns are addressed in some way, home ownership is not the be all and end all. We will never go back to the days where social housing was for everyone, it just isn't feasible so alternative solutions have to be sought.

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