Major association and investor question need for HAs to own social housing

The Hyde Group and M&G Investments suggested that housing associations should move away from their traditional focus on owning assets.

The debate follows Legal and General announcing its intention to become the leading private affordable housing provider in the UK, as part of a plan to establish institutional investors as landlords.

The insurance, pensions and investment management company is looking to shake up the “underinvested” affordable housing sector by launching its own for-profit registered provider, called Legal & General Affordable Homes, which will use equity funding to deliver 3,000 homes per year.

Peter Denton, group finance director at Hyde Housing, addressed the topic of ownership of assets at the conference, saying: “We have to challenge the historic mantra that we as housing associations are here to build, manage and own. We are here to build and manage but not necessarily to own.”

“New entrants coming into the market provide an opportunity to ensure that tenants are protected in a properly regulated way that allows capital to be recycled for us to further our aims.”

Mark Davie, head of social housing at asset manager M&G Investments, predicted a growth in the use of off-balance-sheet funding, and lease-backed and project-type finance arrangements.

He said: “The sector also needs to revisit its preoccupation with owning assets. It’s about provision of homes.”

He also said that the sector had to get rid of its “historical aversion” to inflation-linked debt, adding that it can “work well in certain circumstances to help you deliver more housing”.