Associations could float on stock market to raise cash
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A group of lawyers, bankers and chief executives will investigate whether housing associations could float on the stock market to raise funds.
The research group, being established by Simon Randall, a consultant at law firm LG, will look at a range of ways to introduce equity investment into housing associations. The group will examine familiar investment methods, such as joint venture companies and investors taking equity stakes, in addition to newer ideas such as associations floating on the stock market or becoming community interest companies. This is a form of social enterprise which can pay limited dividends in return for equity investment.
Mr Randall said the group would look at the practicalities of each option including the attitudes of regulators and funders, and whether associations would have to repay grant before being allowed to float.
Mr Randall said: ‘There is going to be less money through grant and we must find other ways of bringing in money for housing of all kinds.’
So far the group includes two bankers, three lawyers, a serving chief executive and two retired chief executives. Mr Randall is keen to attract more members to the group.
A spokesperson for housing association Places for People, which is not part of the group, said: ‘The question of how we fund future delivery of housing in the UK against an environment with a number of economic challenges and that is why we have been talking to a wide range of people about equity funding, gap funding and using real estate investment trusts and tax increment financing.’ He added that the association is not looking at flotation.
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Readers' comments (5)
Howie | 13/11/2009 11:08 am
And pigs could fly.
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Peter | 13/11/2009 11:30 am
A shark expert once told me that swimming with the sharks takes a lot of skill, patience, caution, understanding and a special repellant. Even armed with all that your can never guarantee your safety. He has lost his left calf muscle to bull shark in 3ft of water!
So HAs now want to raise money by floating their organisations in the turbulent and predatory waters of the money markets? Is there something wrong in swimming in non shark infested waters?
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Harry Lime | 13/11/2009 11:35 am
Am I being unduly cynical that such ideas are being floated with there being every possibility of a tory govt coming over the hill? Would seem to me to not be too much of a stretch of the imagination, especially with the recent discussions about "flexible tenancies" and varying rents dependent upon ability to pay.....
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Chris | 13/11/2009 12:30 pm
Perish the thought that Housing Associations be brought in the the real world where competition drives through efficiencies with the weak being taken over by the strong. Before you know it, we'd be the envy of the world and the taxpayer would save the vast expense of the TSA, HCA and Audit Commission. It will never happen!!! THEY won't let it!!!!
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Harry Lime | 13/11/2009 2:06 pm
What was that Chris? The weak being exploited by the strong? oops sorry, my mistake...... How under current circumstances (and I'm struggling to think of any) would it benefit the future provision of affordable social housing? HA's are not for profit, and I admit they're not overly efficient but their profit does go back into services and further housing. How would a profit making firm go about things, bearing in mind the initial assumption should be of the status quo, i.e rent and tenancy assumptions being "as are" I'm all ears.......
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