M&G has struck a series of deals worth a combined £62.7 mln (€71 mln) to acquire 370 homes through a trio of partnerships with Chelmer Housing Partnership (CHP), Hyde Group (Hyde), and HSPG-backed Park Properties Housing Association (PPHA).
The deals were made on behalf of the M&G Shared Ownership Fund which aims to provide investors with index-linked rental income and house price exposure by acquiring or funding the delivery of affordable homes.
Under the terms of the transactions, M&G will directly fund the development of new homes or buy existing and pipeline stock, in turn, enabling the housing associations to recycle capital into new homes and further affordable housing initiatives. CHP, Hyde and PPHA will continue to manage the properties on behalf of M&G, ensuring a seamless transition for residents.
Alex Greaves, head of UK and European Living at M&G Real Estate, said: 'These latest strategic partnerships mark a crucial step in our journey to meeting the significant demand for the shared ownership model in areas of the country where it is most needed. It’s also a brilliant example of how the private and public sectors can collaborate to make a positive impact on an underserved market. We’re delighted to be working with Hyde again and look forward to a long and productive partnerships with CHP and PPHA.'
With the closure of the Government’s Help-to-Buy scheme earlier this year, shared ownership offers an affordable route to home ownership for first-time buyers and those who are unable to afford owning their home outright. The part-buy-part-rent model provides a secure home managed by a professional landlord through a reduced deposit based on a part equity share, while the rent on the ‘unbought’ equity is often significantly lower than the equivalent market rent. Shared owners then have the benefit of house price growth and the ability to increase equity share – otherwise known as ‘staircasing’ – at a manageable pace.
Guy Slocombe, Chief Investment Officer for the Hyde Group, added: 'This deal demonstrates how this model allows us to accelerate the delivery of more affordable homes while enabling us to quickly recycle the capital we generate into new schemes. By combining our expertise in managing homes well with the investment M&G offers, we are bringing new investment into the sector, and it is playing an important role in meeting the challenges of the housing crisis.'