Group tells deputy PM that for-profit sector could increase equity fundraising to £3bn a year, leading to 30,000 new homes annually
A group of for-profit social housing providers backed by institutional capital has written to Angela Rayner calling for changes to tax and rules that “disadvantage” them compared to traditional non-profit housing associations.
The seven providers (see box below), which call themselves the For-Profit Registered Providers’ (FPRP) Network, have written to the deputy prime minister requesting a meeting to discuss “how further capital can be encouraged” for social and affordable homes.
The FPRP Network said the for-profit sector has raised nearly £1bn of equity capital from UK local government pension schemes alone and this, with leverage, is “expected to contribute up to 10,000 new affordable homes”. It said it believes it is “entirely possible” to increase equity fundraising to £3bn a year, leading to 30,000 new homes annually.
The letter, seen by Building’s sister title Housing Today, said there are “various steps” that would help encourage further investor interest.
It said adjustments to rules that “disadvantage for-profits vs non-profits”, such as Stamp Duty Land Tax, grant repayment and access to exempt accommodation payments, would help to encourage greater commitments to funding.
The FPRP Network letter signatories
The following have signed the letter to Angela Rayner:
Moses Hirschler, chief executive, Cromwood Housing
Richard McCarthy, chair, Funding Affordable Homes
Colin Sherriff, chair, Grainger Trust
Dominic Curtis, chief executive, Simply Affordable Homes
Graham Woolfman, chair, St Arthur Homes
Sam Roden, chief executive, Storm Housing Group
Dale Meredith, chair, T3 Residential
“There is considerable scope for FPRP activity to ramp up significantly, bringing benefits for government in supporting achievement of your housing delivery objectives”, it said. “There are various steps that would help encourage greater investor interest and commitments of funding to the development of new homes.”
The letter said greater customer service expectations, fire safety remediation and decarbonisation all mean “traditional housing associations and local authorities are now dedicating a more substantial part of their attention and revenue to improving their existing homes”.
It said: “This has reduced their capacity for new development, particularly considering building cost inflation and high interest rates. This is where the FPRPs can step up to help.”
A spokesperson for the FPRP Network said: “The signatories have suggested a constructive dialogue with government and other relevant statutory bodies to discuss ways to achieve an appropriate mix of social and affordable housing by type and tenure to tackle the national housing shortage we face today.”
The Ministry for Housing, Communities and Local Government has been approached for comment.
Funding the Future
Building’s Funding the Future campaign seeks to examine fresh ways of attracting and using finance to boost construction projects at a time of constrained public finances.
It will examine options for public-private partnerships that can draw on private capital to pay for large infrastructure projects, schools, prisons, hospitals and housing.
It will also look at existing models for private and public funding and examine how these can be optimised to ensure funding is efficiently spent and leads to more shovels in the ground as Keir Starmer looks to construction to boost flagging economic growth.
Over the next few months we will share learning, consult with industry and collect ideas from readers. This will culminate in a special report to be published at our Building the Future Live Conference in London on 2 October - click here to book your tickets now.
To share your ideas of new funding models, email carl.brown@assemblemediagroup.co.uk. To find the campaign on social media follow #Buildingfundfuture.
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