Research by Savills finds for-profits could invest £23bn in homes by 2026

For-profit registered providers of social housing have the potential to deliver up to 130,000 new homes over five years, Savills has predicted

The consultancy in a new report, Private Capital in Affordable Housing, predicts for-profit providers could commit up to £23bn to fund homes for shared ownership and affordable or social rent by 2026. This is based on interviews by Savills with seven of the largest for-profit providers.

The number of for-profit registered providers of housing, which are allowed under the 2008 Housing and Regeneration Act, has more than doubled from 25 in 2015 to 53 this year.

Savills said that although for-profit providers owned less than 0.2% of affordable house stock in 2020, this percentage is likely to grow as “investor appetite for affordable homes is substantial.”

Institutional investors and fund managers, including Legal & General, Blackstone, Man Group and M&G have all registered for-profit providers in the last three years. Savills said affordable housing is attractive to investors because it offers “long-term, inflation-linked income” and there is a demand for investments with Environmental, Social and Governance (ESG) credentials.

See also: Man Group’s for-profit registered provider approved by regulator

For-profit providers have to follow broadly the same regulatory standards as traditional housing associations (HAs) and they can access government grant. However the fact they are allowed to distribute dividends to shareholders means they can attract equity investment from a wider range of investors.

Savills said that to date for-profit providers have mainly focused on low-cost home ownership products such as shared ownership, with the seven biggest owning 12,227 low cost home ownership homes in March, a 9.9% increase on the previous year’s figure. The report said they looked set to grow their share of low-cost home ownership stock from 10% to 25% from development alone by 2026.

However, it said: “We expect to see FPRPs [For Profit Registered Providers] taking on more general needs rental stock as they become more established and can benefit from efficiencies of scale.”

Savills said there are “strong opportunities” for partnerships between housing associations and for-profit providers.

It said: “We are seeing interest in development joint ventures between HAs [Housing Associations] and new entrant FPRPs, to marry HA development expertise with private capital. This could include setting up a joint venture FPRP, to acquire homes developed by the HA and funded by the FPRP.”

“This is a marriage of HA development capacity and secure pipeline, with investor partner capital. With management retained by the HA, these investment partnerships can be structured flexibly to meet both partners’ objectives for returns.”

Full list of registered for-profit providers

Organisation name Date of registration
AAIM Housing RP Limited 02/04/2020
AccommodationYes Limited 05/03/2015
Affordable Housing Communities Limited 09/11/2016
Anchor Property Holdings Limited 04/07/2012
Ascent Housing LLP 12/07/2012
Asett Homes Ltd 01/08/2017
Auxesia Homes Limited 02/05/2013
Castle Housing Limited 19/04/2012
Cromwood Housing Ltd 23/04/2013
Dawson Housing Ltd 06/09/2018
Dholak Partnership Homes Limited 05/12/2019
Dovepark Properties Limited 13/07/2017
Fairplace Homes Ltd 02/10/2014
Feldon Housing Limited 07/06/2018
First Affordable Limited 06/10/2016
French Weir Affordable Homes LLP 26/10/2012
Funding Affordable Homes Housing Association Limited 08/08/2016
Grainger Trust Limited 07/11/2012
Grevayne Social Housing Limited 03/06/2021
Habitare Homes Limited 01/04/2021
Hamelin Trust Services Limited 13/12/2011
Hellens Residential Limited 14/11/2012
Heyford Regeneration Limited 02/10/2014
Heylo Housing Registered Provider Limited 04/08/2011
J & M Residential Lettings Limited 24/09/2012
Kentish Homes Limited 18/12/2015
Keystage Properties Limited 12/07/2012
Legal & General Affordable Homes Limited 06/12/2018
Linden First Limited 22/02/2013
Loddon Homes Limited 10/06/2016
M&G UK Shared Ownership Limited 05/11/2020
Major Housing Association Limited 25/01/2011
Malins Affordable Homes Limited 03/10/2013
McCarthy & Stone (Shared Ownership) Limited 04/02/2021
MP Living Limited 14/01/2021
MTD Housing Limited 18/12/2018
Oak Housing Limited 15/06/2012
Orchard & Shipman Homes Limited 29/03/2012
Park Properties Housing Association Ltd 06/09/2018
Peal Community Housing Limited 06/12/2018
Pinnacle Spaces Limited 29/03/2012
Preferred Homes Limited 02/04/2020
ReSI Homes Limited 23/03/2020
ReSI Housing Limited 05/07/2018
Rex Housing Limited 03/03/2016
Rosewood Housing Limited 02/08/2018
Sage Housing Limited 13/12/2010
Sage Rented Limited 05/12/2019
Sage Shared Ownership Limited 05/12/2019
Seymour Street Homes Limited 04/04/2017
Shanly Partnership Homes Limited 29/03/2012
St. Arthur Homes Limited 22/02/2013
Swift Homes Limited 05/12/2017
UCCLT Housing Ltd 05/09/2017
V & F Homes Limited 08/02/2018

 Source: Regulator of Social Housing