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Optivo to cut private sale homes from development plan

Optivo plans to cut up to 700 market sale homes from its development plans as part of measures to de-risk its exposure to the volatile UK housing market.

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Paul Hackett, chief executive of Optivo (picture: Jon Enoch)
Paul Hackett, chief executive of Optivo (picture: Jon Enoch)
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Optivo to cut market sale homes from development plan #ukhousing

Optivo boss @PaulHackett10 tells @insidehousing that the association plans to cut market sale completely from its development pipeline #ukhousing

Paul Hackett, chief executive of Optivo, told Inside Housing that the 15% of its development plan to 2022 that had been slated as market sale homes will now be allocated to affordable housing, due to a rethink in its development strategy.

The Optivo boss also revealed to the magazine that the association is due to get board approval for an acceleration in its development plans next month.

Mr Hackett said: “We have decided to be more ambitious than originally planned when we merged in May 2017, accelerating the pace of build up to 2022 and also moving away from market sale.”

The new plans would see Optivo build up to 4,850 homes by March 2022, up from 4,250 in the current plans.


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Mr Hackett added: “Under current market conditions the programme will be entirely affordable housing. We sought to de-risk ourselves from market sales, which account for 15% of our build programme.”

“We have a deliberate policy to focus on affordable housing – there is a massive need [for affordable homes]. Secondly, we believe that although shared ownership [development] is not without risk, it is less risky than market sale.

“The decision is due to two things, both the softening of the housing market and the desire to build more affordable housing.”

According to Optivo’s strategic plan, which outlines the association’s aims from 2017 to 2020/21, the provider had previously planned to build 1,500 homes a year and invest £400m every year by 2021.

The strategy states that open market rent “provides an opportunity to grow the commercial portfolio, spread risk on larger sites, and help to grow turnover”.

Optivo, which was formed from the merger of Amicus Horizon and Viridian in May 2017, started 1,003 new homes and completed 981 new homes in the financial year 2018/19.

 

UPDATE: at 09.00am, 23/04/19 This article has been updated. The original article incorrectly stated that the Optivo had increased the number of homes it planned to build by 2022 from 4,500 to 4,850. Optivo has actually increased its development pipeline from 4,250 to 4,850 homes.

The number of starts and completions of new homes has also been updated. Optivo has provided starts and completion statistics for the financial year 2018/19.

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