Consultant and housing association A2 Dominion join forces to bid for HCA private rental scheme
Consultant Savills and housing association A2 Dominion are teaming up to establish a fund of up to £250m to invest in homes for private rent.
The team is planning to bid for a place on the Homes and Communities Agency’s (HCA) scheme, announced last week, to boost investment in the sector.
A2 Dominion said it would invest £50m of property into the fund, and manage the schemes. It is in talks with five other housing associations that may also invest stock, sites or assets.
Savills is to invest an as yet undecided amount of equity in the joint venture, and provide advice on asset management and which properties to invest in.
The team hopes the fund could take on mothballed sites from other developers. The fund could also be based partly offshore, for investors to take advantage of lower taxation and partly onshore for those who want greater transparency. The onshore part might use money raised by local authorities at lower rates.
We can’t just rely on government subsidy and private finance to develop housing
John Knevett, A2 Dominion
John Knevett, A2 Dominion’s deputy chief executive and chief commercial officer, said the fund could own homes for intermediate rent and key worker housing, and finish sites started by builders that had gone bust.
He said the fund could also buy homes from housing associations, as long as they had not been in receipt of a government grant.
He added that the scheme could enable housing associations to diversify their sources of funds.
He said: “We can’t just rely on government subsidy and private finance from banks. I am looking at what options will we have to deliver accommodation when public subsidy dries up.”
The HCA’s deadline for expressions of interest is 1 June.