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Giant property investor Blackstone hits back after NHF legal action
Giant property investor Blackstone has hit back after the National Housing Federation (NHF) took legal action to stop its social housing provider calling itself a housing association.
Lawyers acting for the NHF wrote to Sage Housing last week warning that they believed it to be in breach of the Housing Associations Act 1985 by using the term, the Financial Times reported on Friday.
Sage, which the Wall Street behemoth acquired a 90% stake in late last year, has agreed to drop ‘housing association’ from its name since receiving the letter.
In January Blackstone announced an intention to use its massive bidding power to “compete head-on with housing associations” for Section 106 deals.
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In a blog published on Friday, David Orr, chief executive of the NHF, suggested that for-profit housing associations are damaging to the reputation of the traditional sector.
He added: “Our reputation, built over 150 years, is hard won and critical to our present and future success.
“We cannot allow that reputation to be borrowed and worn like a cloak around the shoulders of organisations which are not housing associations.”
A spokesperson for Blackstone told Inside Housing: “[The housing sector has] historically been a capital-starved sector, both in terms of the supply of stock and capital investment into existing stock.
“It is a lower-yielding asset class, but capital invested into the assets – particularly in the case of assets where previous owners may have invested little or nothing for 20-plus years – leads to win-win outcomes, including for tenants.
“We are bringing more capital into this sector across Europe and globally, which should be a positive in addressing the biggest issue – the undersupply of housing stock, including here in the UK.”
For-profit housing associations make up less than 3% of the sector, but a number have been registered in the past year.
Last month, Legal & General (L&G), the UK’s largest institutional investor, announced plans for a new housing provider with a development target of up to 3,000 homes a year.
That would make the organisation – called L&G Affordable Homes – the biggest builder in the affordable housing sector.
British Land has also set up its own for-profit affordable housing outfit.
In a social housing policy document published last month, Labour pledged to prohibit for-profit housing associations.
