McCarthy & Stone enters affordable housing market

The UK’s largest retirement housebuilder has set up an affordable housing business in a move it has said will allow it to offer more choice to customers.

The Regulator of Social Housing yesterday published data revealing that McCarthy & Stone, which was last month bought out by US private equity firm Lone Star in a £647m transaction, was confirmed as a registered provider (RP) of affordable housing on February 4.

The firm said in a statement to Housing Today that the move, which follows initiative by other profit-making businesses to set up affordable housing arms, was “a key part of our long-term strategy to offer our customers increased choice of tenure and help more people access the many benefits of living in high-quality retirement and Extra Care housing.”

McCarthy & Stone’s move follows a terrible trading year for the business, which has been hit much harder than other housebuilders because of the high average age of its consumers, who have proved reluctant to re-enter the housing market. Revenue at the firm fell by 73% in the year to October, to just £197m.

However, prior to the pandemic it had already embarked on a long-term shift in its business model away from simply providing retirement housing without care services, to also offering other options, such as extra care housing where homes come with additional care services.

McCarthy & Stone’s move is part of the continued rise of “for-profit” affordable housing providers, with operators including L&G and investment bank Blackstone setting up businesses.

A spokesperson for McCarthy & Stone said: “We are pleased that McCarthy Stone (Shared Ownership) Limited has been registered with the Regulator of Social Housing.

“It is a key part of our long-term strategy to offer our customers increased choice of tenure and help more people access the many benefits of living in high-quality retirement and Extra Care housing.

“In future we will be able to offer our customers a full range of tenures, including affordable shared ownership, outright ownership, private rent and private shared ownership.”