A senior Homes England official said there was a “natural match” between institutional investment and social housing and said the agency’s priority was to diversify the type of capital that social landlords access.
Tayo Bilewu from Civitas and Fay Mitchelson from Homes England during a panel session on innovative financing models for new home creation (Image: Guzelian)
Homes England is focused on “demystifying both sides of the table” between institutional capital and the public housing sector, said a senior #CIHHousing #UKhousing
Fay Mitchelson, Head of Joint Ventures at Homes England, said at the Housing 2021 conference in Manchester today that a “priority” for the government housing delivery agency was “access to capital, capital diversity and capital stability to enhance”. “In the area of affordable housing.
During a panel session on innovative financing models for new housing creation, Ms. Mitchelson said that there is a “natural match” between the sector and institutional capital and that there are many “attractions” to using equity models, such as generating new revenue streams through fee schemes.
She said Homes England is trying to “demystify both sides of the table” and is particularly keen to ensure that institutional capital can be used to fund the development of a new offering, rather than “just taking what is already there.”
Earlier this year Homes England invested £ 10m in a joint property fund set up by M&G, the major investor.
The fund will be used to fund a £ 500m pipeline of approximately 2,000 shared apartments to be delivered in partnership with Hyde, with the homes owned by M&G but managed and serviced by Hyde.
Earlier this year, Inside Housing reported that traditional housing companies are increasingly looking for such businesses, which would mean they own fewer of the homes they have built.
On the same panel, Tayo Bilewu, investment director at Civitas Investment Management, said housing associations need to get better at ensuring that their relationship with investors is “fair”.
He said, “How is the sector … getting away from seeing capital as a savior … and we are committed to the investor’s dictation rather than dictating the terms of engagement?”
Civitas Investment Management describes itself as a “leading impact investor acting on behalf of institutions around the world”. It has focused on the specially assisted housing sector for adults with learning difficulties and disabilities, using a model of long-term rental properties to housing associations.
The social housing regulator has declared some of Civitas’ housing provider partners non-compliant.
When asked by Social Housing, Inside Housing’s sister publication, whether these regulatory judgments are a problem for investors looking at the sector, Ms. Mitchelson said, “When we talk about innovative and new things, this perception of fear arises. How do we manage? How do we go through the risks? And to be honest, it’s a process of time and precedents and the market evolves. “
She added, “I think the activities Homes England was involved in today demonstrated that we, as government housing accelerators, play this unique role because we often provide the security or confidence in the sector – its stability and its Future. “- so our involvement in transactions was really designed to focus this area.”
Anne Waterhouse, Interim Chief Executive at A2 Dominion, said: “The billion dollar financing has been successful and has produced real results for clients in need of housing.
“There have been some challenging deals that have not worked and I think as long as we learn from them, borrowers will take some of that responsibility to really understand the barriers and frameworks that exist and to work accordingly. I think we can see that further successful and innovative models will establish themselves in the industry. ”