Shared ownership company buys housing association

Heylo Housing, initially established in 2014 with £180m of investment from the Lancashire County Pension Fund, has since purchased almost 1,000 shared ownership properties in 120 local authorities.

In order to continue its growth it decided to seek housing association status, as this is a requirement of many mortgage providers and Section 106 agreements.

As a result, it has completed the purchase of Three Conditions, a registered housing association established in 2011 which currently owns no housing.

It is now in talks with several large UK pension funds as it seeks to scale up its investment in shared ownership units.

Heylo Housing is set up to buy shared ownership units developed by private house builders as affordable housing contributions imposed by planning laws.

It offers institutions an inflation-linked return, which is identical to the Retail Prices Index inflation clause that governs the rent increases in most shared ownership agreements.

The company currently has a partnership with national housing association The Guinness Partnership which maintains the homes and collects the rents.

It believes if it can secure the £1bn of investment by 2020, it will be able to fund the acquisition of between 7,000 and 8,000 shared ownership units.

It is also offering to sell homes to local authorities on a shared ownership basis.

This would allow them to use Right to Buy receipts, which can only fund up to 30% of a property, to purchase a home on a shared ownership basis which could then be sublet at below market rent. Heylo Housing is understood to be in talks with a number of local authorities about these deals.

Nicholas McAlpine-Lee, chief executive of Heylo Housing, said: “What we want to do in launching this is raise the profile of institutional investment in shared ownership housing and demonstrate that this can work, and as well as being a good investment it’s something which a huge amount of people need.”