Institutions investing in affordable housing must recognise needs of the sector

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New money for the sector is urgently needed but to have real impact partnership deals have to be on the right terms, says Richard Jones

There is a growing trend within the residential sector for institutional funding to target affordable housing. With the likes of Blackstone, Legal & General, Cheyne Capital and CBRE all establishing specific funds it is worth looking at the why and understanding how it could benefit the wider residential sector.

Investors will obviously look at the affordable housing opportunity from a purely financial perspective. The value of the asset, because it is based on a capitalised rental flow rather than dictated by market forces, is both stable and predictable, something the financial markets find as very attractive. With a growing need for affordable housing across the UK, occupancy levels are not only very high but are as near to guaranteed as could possibly be.

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