Housing associations Notting Hill Genesis and A2Dominion have put three development blocks up for sale for more than £180m, as the shared ownership market flounders.
NHG is marketing two blocks of shared ownership flats close to completion in Peckham and Wembley. Facing a downbeat sales market in 2019, NHG boosted the number of shared ownership flats at Peckham Place, SE15 (pictured), to 201 out of 333 flats. It launched sales later in the year, including bulk block buys at 100% equity share. NHG is currently offering a block of 108 shared ownership flats valued at £60m.
At a second scheme, Brent House in Wembley, NHG is selling a block of 106 flats, also valued at around £60m. Here, too, NHG boosted the proportion of shared ownership in place of private sale, and is now seeking to sell the building to the institutional market.
In Battersea, A2Dominion is marketing a block at York Place, SW11, previously planned as a mix of shared ownership and private, as 100% private. It has instructed Cushman & Wakefield to sell the block with a guide price of £60m and is in talks with a number of institutional investors that would acquire the scheme as a build-to-rent opportunity.
Housing associations previously seeking market sales to cross-subsidise affordable housing delivery are increasing turning to bulk sales for rental in a downbeat market.
Investors eyeing secure, long-term returns with inflation-linked income are keen to snap up affordable rental housing, including shared ownership tenures.
This provides a capital receipt for a housing association, bolstering its balance sheet and surplus, in place of shared ownership homes which offer lower loan security to creditors.
In the wake of coronavirus, credit rating agency Moody’s anticipates a 30-40% decline in market sales for housing associations, rising to 55% in a severe scenario, making bulk sales for rental all the more attractive.