Octopus Real Estate has announced its entrance into the UK affordable housing market, saying it wants to “accelerate the delivery of high-quality, genuinely affordable homes”.
Octopus says it will work with housing associations to help alleviate “pressures” such as net-zero targets and building-safety regulations by providing long-term, patient capital to the sector to fund the delivery and long-term ownership of new homes.
Registered provider acquisition
To support its move into the sector, Octopus has acquired a Registered Provider (RP) of Social Housing, and will operate a direct let model – rather than lease-based – to ensure a “fair sharing” of risk with partners.
Octopus says the acquisition will help ensure that it remains subject to appropriate regulatory oversight and enables the company to draw on grant funding to support the delivery of new homes.
Benjamin Davis, CEO of Octopus Real Estate, said: “We are launching an affordable housing strategy now because the current cost of living crisis is rapidly increasing the already urgent need for quality, genuinely affordable homes.
“The costs of decarbonisation, as well as the ongoing impact of post-Grenfell regulations, are restricting the amount of new development many housing associations can undertake at a time when delivery needs to increase significantly.
“We believe we can help solve these challenges together, as long-term partners.”
He continued: “What’s more, rising energy costs are exacerbating fuel poverty for affordable housing residents across the country.
“We intend to tackle this head-on with the support and expertise of Octopus Energy, the energy generation and supply business within Octopus Group.
“In doing so, we’ll be able to fund the development of more energy efficient homes and work alongside housing association partners to improve the energy performance of existing homes, reducing residents’ fuel bills.”
Octopus has appointed Elizabeth Austerberry as the chair of its registered provider.
Austerberry joins following her retirement as CEO of Moat, a 20,000-home housing association association which she has led since 2013.
She previously held senior roles at EY, Bank of Scotland, BNP Paribas, and Savills, as well as National Housing Federation.
Elizabeth Austerberry, appointee chair of the registered provider, said: “Housing associations and local authorities need trusted partners with long-term capital to help them keep delivering new homes whilst they address net-zero and building safety costs on their existing portfolios.
“As a B Corp with strong ESG credentials and a track record of purpose-led, responsible investing, Octopus is the perfect partner.
“In my discussions with the Octopus team, I was struck by their commitment to addressing the concerns of both providers and residents of affordable housing.
“Their deep experience as investors and landlords of care homes and retirement villages gave me great confidence in their ability to support this sector.
“Together, we have ambitious plans, and I’m excited for what we’ll achieve in the years ahead.”
Benjamin Davis, CEO, Octopus Real Estate, said: “It’s great to have Elizabeth on board. She’s highly experienced and passionate about the sector, and that enthusiasm is just what we need if we’re going to impart real change.
“At Octopus, we’re on a mission to reimagine real estate investment, focusing on long-term relationships, and funding real estate that delivers real impact across society.
“Our new Affordable Housing strategy epitomises that approach, so we’re excited to enter the market and deliver homes which make a real difference to the lives of residents.”
Image: Worawee Meepian/Shutterstock
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