A study by consultancy Savills this month estimated that for-profit providers will own 141,000 homes by 2027. The agency estimated that over the next five years providers who have already RSH registrants would increase their stock to approximately 111,400 new homes, while new entrants would add an additional 30,000 homes.
Helen Collins, head of Savills’ affordable housing advisory team, expects for-profit companies to take more development risk and be more active in land development. “I think with more partnerships we could see more innovation in the sector.”
She points out that the issues facing associations around the cost of fire safety upgrades and meeting net zero will persist, while inflation and labor shortages are challenges for everyone.
Where investment funds have an advantage is that some hold other assets, such as build-to-let, in addition to their affordable and social housing stock, which means they have the capacity manage risks in the event of a downturn.
“I think it would be nice to see more housing associations and for-profit providers working alongside build-to-let operators and home builders. There’s a lot more to come with partnerships and risk sharing,” she says.
But Ms Collins warns that “just having access to money doesn’t mean you’re going to be a good developer”.
Maggie Rafalowicz, director of Campbell Tickell, agrees that at a time when the sector is once again focusing on the tenant experience and improving existing stock, there is room for more partnerships in new developments.
She predicts that partnerships could emerge between local authorities and for-profit providers. At this time, it appears that these earlier concerns about for-profit affordable housing have not materialized. But one organization has warned that while for-profit companies can inject investment into a sector where it is desperately needed, shareholders’ main goal is to extract value.
“The financialization of social housing is of great concern to me. In the past, many of these companies have acted inconsistently with the right to housing under international law,” says Sam Freeman, research director at The Shift, an organization that supports and advocates for grassroots groups on the right. to housing. “History does not paint a picture of these types of for-profit entities as responsible housing providers.”
For-profit companies go ahead