Housing association enters market rent sector
A landlord has moved to diversify its portfolio by buying a number of homes in the market rent sector.
Sovereign Housing Association has bought 84 homes to let at market rates in Bristol, Swindon and Gloucester. The 33,000-home landlord acquired the first tranche of 34 homes last year, with the next 50 being added more recently. Completed units have so far taken an average of two months to rent out.
The association said the move into the market rent sector came on the back of a Hometrack report last week saying that housing turnover was set to hit a 40-year low.
‘We identified a gap in the market and these homes have been let very quickly, due to the increasing demand in the private rented market and the high quality of the units we purchased,’ said James Gibson, regional development director at Sovereign.
Mr Gibson added that he expected the association to make more similar purchases in the coming years as an increasing number of tenants moved into the private rented sector.
‘Given the uncertainty in the housing market as demonstrated by the Hometrack report and the reluctance of purchasers to commit to buying new homes, and in light of the success of our first steps into the private rental sector, we anticipate that Sovereign will make further purchases in the future.’
Sovereign merged its four subsidiary housing associations into one entity earlier this year, in a move that it said would allow it to free up more housing stock to borrow against.
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Readers' comments (47)
Harry Lime | 05/12/2011 1:31 pm
Personally I think this is a good move. If you're forced to rent privately at least you'd have the comfort of (some) degree of accountability from your landlord. Equally you'd have an element of security of tenure, it's in their interests to minimise voids etc and in theory the property is yours for as long as you pay for it and behave yourself.
It's about the closest you will get to a secure tenancy in the "private" sector.....
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Concerned Landlord | 05/12/2011 1:31 pm
Housing Association should be building homes!!! Not buying the existing stock.
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F451 | 05/12/2011 1:56 pm
Absolutely Concerned Landlord - buying stock, and the cheaper the better, is the preserve of the spiv landlord.
At least with these homes going to a responsible landlord the profits will be recycled into much needed new homes, not wasted away by the incompetent nor tax-havened away by the greedy.
If the spiv's are squeeking then it probably is a good idea.
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Paul Jones | 05/12/2011 2:02 pm
I believe that housing associations have a moral obligation to rent properties at a low rent that is affordable to those on minimum wage. They should not rent at market or near market rates, especially in London and other high cost areas. The whole point of social housing was to provide low cost homes.
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Concerned Landlord | 05/12/2011 3:39 pm
F451: We finally get to the truth of the matter. You bleet on about afforadable rents, but when a housing association decides to charge market rents, you turn a blind eye.
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F451 | 05/12/2011 3:41 pm
Hardly blind, but recognising that every penny kept out of your grasping little mit is a penny to invest in providing housing Concerned Landlord.
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Concerned Landlord | 05/12/2011 3:45 pm
F451: How does that help the tenant?
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Harry Lime | 05/12/2011 4:18 pm
CL, the tenant in any circumstance would be rewarded with a landlord that would be held up to accountability for it's actions and the Tenant would be able to complain without fear of reprisals. In the event of a tenant of a private landlord making a formal complaint to Env Health and getting an improvement order slapped on the property, do you think they'd easily renew their contact when it's up next??
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Mark Alexander | 05/12/2011 5:07 pm
The reason that unscropulous landlords can operate, especially in large cities, is lack of supply of quality affordable property. When supply is increased, so will choice. Tenants will then vote with their feet. There are many good private landlords and tenants who welcome a good working relationship with them. The PRS provide 4.3 million households and more are needed. I agree with the poster who said housing associations should be building. Lack of building is doing the economy no favours. By 2015 as much housing as a city the size of Birmingham needs to be created to cater for demand. It's not happening and that's worrying. If developers, the PRS and the RSL's don't start creating new housing then overcrowding, homelessness and further pressure on rents will continue to rise. Without satisfying supply, the rogues will never be driven to improve their standards or exit the business.
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F451 | 05/12/2011 5:07 pm
It helps those with housing need concerned landlord.
Sadly, what is built is likely to be the 80%MR, but as that is all the government will allow to be built then that is the best one can aim for.
What is sad is the cost of HB in these high rent solutions, but I repeat, paying the money to Spiv Landlords is like throwing it down the drain in terms of society's gain.
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