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Savills housing boss: ‘for-profits not eating HAs’ lunch’

The housing association sector must stop looking at for-profit providers as ‘eating their lunch’ and become more open to allowing other sources of capital into the sector, a Savills housing head has said.

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Picture: Guzelian
Picture: Guzelian
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Savills housing head has told associations to stop thinking of for-profit providers as “eating their lunch” #ukhousing

Speaking at the Chartered Institute of Housing’s (CIH) Total Housing conference in Brighton yesterday, Robert Grundy, head of housing at Savills, said that the sector had become too defensive when it comes to new private players and that it should be grateful that money was coming in.

He said: “The sector can be defensive and say these organisations are coming in eating our lunch by buying our Section 106s [affordable homes built by private developers].

“That is what happens in markets; they are very able to do something else [and] we should be grateful capital wants to come into the market, because we all know we need more money in sector.”

Mr Grundy said that Savills regularly saw investors coming into their offices wanting to invest in new stock, but that in many cases there was not the stock available, due to undersupply.

He said: “They want to invest in affordable housing [but] clearly their big problem is they can’t source stock – they can’t believe there isn’t enough product to invest in.


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“What can associations and local authorities do? You are uniquely placed to develop and create opportunities, and source the land to do the whole thing and go into partnership with many of these people who have very similar objectives in terms of the income profile that they want delivered.”

The social housing sector has seen a flurry of new for-profit registered providers entering the sector, including private equity giant Blackstone, institutional investor Legal & General and billionaire family The Pears Group.

Two weeks ago, the world’s largest publicly traded hedge fund, Man Group, announced its intention to launch its own registered provider division.

Mr Grundy also said that the sector needed to focus more on the economic benefits when talking about the positives of the sector, as well as focusing on the social purpose.

He said: “We need to talk using the same language as the people we are talking to; we often talk about need and social purpose and we all really, really get that, but not everybody is interested in that and are more interested in money and the economy, and so we need to think about how we present ourselves.”

Mr Grundy was speaking at the CIH’s Total Housing conference session looking at the impact of Brexit on the social housing sector.

He warned that Brexit and the stalling housing market are likely to have a major impact on the number of Section 106 homes that were coming to market, and called for associations to “take back control” of their delivery.

Savills predicted in November that a housing market downturn could see the number of Section 106 homes available to housing associations cut in half.

He said: “Associations need to become much more actively involved in the process of building stuff instead of using kit that others build through Section 106, because Section 106 is going to slowdown, you can’t rely on it.”

He added that this meant associations would need to upskill and bring in chartered surveyors, chartered town planners and “real professionals” that could help deliver homes.

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