Housing association giant moves into private rentals
The move for housing associations to enter the private rented sector is gathering pace.
As from yesterday Genesis, which operates across London and the South-East, will be offering one-, two- and three-bedroom properties for private rent, providing homes to anyone – from young professionals to families with children – who cannot afford to buy a home in London or who do not qualify for social housing.
Genesis’ expansion into the private rental sector comes as it launches a report with the Smith Institute on the future of housing associations. The report, also published yesterday, looks at how housing associations will have to become more commercially minded in the light of cuts to Government grants and welfare reform.
According to Genesis, private renting is set to dominate the housing sector over the next decade as people struggle to get on to the property ladder.
It said that current provision is falling short of consumer need, criticising short-term tenancy agreements of between six and 12 months, unpredictable rents increases and the inability to customise their rented homes.
Neil Hadden, chief executive of Genesis, said: “At a time when more people are renting than ever before, we believe it is important to offer high-quality private rental properties. We are able to use our breadth and depth of housing management experience to create a comprehensive offer which will give our tenants greater flexibility, choice and security than other parts of the private rental sector.
“Genesis is all about building better futures and we believe this model of renting is part of the future. We are offering tenants longer tenancies, greater freedom to personalise their homes and the flexibility to move within our property portfolio if their needs change.”
This week, it was also announced that Notting Hill Housing Group is buying 140 properties from Berkeley Homes, which will be rented out privately. The purchase is in partnership with the Greater London Authority and the Homes and Communities Agency. Berkeley, which is also selling a portfolio of homes for rent to the Prudential, plans to have built the homes by March 2015.
Two other housing associations that are to diversify into the build-to-rent sector will do so without recourse to the Government’s funding pot.
Guinness Partnership will build 1,000 private rental properties over the next three years, and Catalyst Housing will build 1,000 units over the next five years. Both will use their own funds.
The two join other housing associations – London & Quadrant, and Places for People – which last year said they would also use their own funds to expand into the private rented sector. Another social landlord, Thames Valley Housing, will use institutional investment.
Several housing associations were last week named alongside house builders as successful bidders for the build-to-rent loan scheme.
Notting Hill Housing Trust, which expects to receive £33.1m from the fund, already owns 500 privately rented homes but plans to quadruple the size of its portfolio in five years.
It plans to build an additional 2,000 homes for market rent, including 423 with the help of government funding.
Other housing associations utilitising the funding include Network Housing Group, which aims to have a portfolio of 500 private rental properties; and Together Housing Group, which has a joint venture with Placefirst that plans to build 600 private rental units.
Meanwhile, one of the country’s largest builders is to build around 600 homes and make them available for private rent, not sale.
Persimmon will develop the build-to-rent properties on 15 of its sites across the UK.
It is the first of the volume house builders to make a public pronouncements on its plans for the sector, although it was not the only developer to receive a share of £1bn worth of government lending.
Article courtesy of Letting Agent Today