Savills Affordable Housing Consultancy has supported Hyde to deliver one of the largest shared ownership housing deals to date.
The £61m transaction involved 422 shared ownership homes in Kent and London being bought by M&G, with Hyde continuing to manage the homes.
Hyde plans to use the proceeds to support building more affordable homes.
Recent Savills research highlighted the potential to unlock latent value from shared ownership portfolios. This release of funds could support increased investment in making homes safer and greener and building more homes to tackle the affordable housing crisis.
Housing associations own more than 194,000 shared ownership homes. Savills estimates the value of the retained equity in existing stock at in excess of £15bn.
Peter Denton, chief executive officer at Hyde, said: “Like all housing associations, Hyde faces multiple funding challenges to ensure our homes are safe, decent and sustainable.
“But we also believe developing new homes is an integral part of our core purpose. If we don’t find new sources of funding, we simply won’t have the resources to keep developing at the same rate.
“This is one of the main reasons we want to work in partnership with others and look at new ways of doing things – including whether we own some homes or manage them on behalf of others.
“The shortage of affordable homes is still real, significant and urgent, and we owe it to our future customers to continue to build new homes, despite competing demands on our money.”
‘A win-win’
Helen Collins, head of Savills Affordable Housing Consultancy, said: “The announcement marks the conclusion of many months of detailed discussions and resident consultation.
“We are really pleased to have been able to help Hyde and M&G strike this deal – congratulations to both teams.
“Since we supported the first large-scale shared ownership transaction – selling the 500-home Asset Trust portfolio in 2016 – we have helped a number of landlords review shared ownership stock holdings as more look to release value for reinvestment.
“As many housing providers continue to build and sell new shared ownership homes, it makes sense to dispose of older stabilized stock, to help fund new delivery.
“The housing provider continues as managing agent, keeping continuity of services for the shared owner, while releasing cash for reinvestment – it’s a win-win.”
Collins added: “Investors and lenders have become increasingly comfortable with the shared ownership model in recent years.
“There is now significant interest in acquiring properties both from the non-profit housing association sector as well as new entrant registered providers and investors.”
Hyde had formed a partnership with M&G Investments to fund a £500m pipeline of around 2,000 sustainable, shared ownership homes and help aspirational home owners take their first steps in the housing market.
The first stage in the partnership saw M&G Investments make a £61m purchase of 422 shared ownership homes in London and Kent from Hyde through a new shared ownership fund.
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