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Ballymore to set up for-profit affordable housing provider
Giant house builder Ballymore is setting up a for-profit affordable housing provider, a report has revealed.
Ballymore to set up for-profit affordable housing provider #UKhousingGiant house builder Ballymore is setting up a for-profit affordable housing provider, a report has revealed #UKhousingThe developer is working towards the establishment of a for-profit registered provider as it struggles to find social landlords in London to buy its Section 106 homes.
Stevan Tennant, managing director for development at Ballymore, said there is a “very real challenge” facing large-scale housing delivery in London.
“The inability to secure a registered provider for Section 106 homes represents a significant risk to bringing forward much-needed housing,” he said.
“Establishing our for-profit registered provider is a proactive response to that challenge, so that we can unlock delivery while creating more integrated communities.”
His comments came in a report from BusinessLDN and property agent CBRE, which called for more action from the government and Greater London Authority to unlock private investment and build affordable homes in London.
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The report recommended streamlining the process through which investors can establish registered providers of affordable housing, which can currently take years. It also urged the government to address a “mismatch” in treatment between for-profit and non-profit providers regarding requirements around the repayment of grant funding.
Ballymore has 14,300 homes in its pipeline in London, but is struggling to procure registered providers for the Section 106 homes in its developments. Owning a for-profit provider will allow the developer to build out its pipeline while continuing to own these Section 106 homes.
Ballymore has not yet concluded the registration process to become a for-profit provider, but it is “hopeful of success”. It is now seeking to outsource tenant allocation and management through either partnering with other registered providers or London boroughs.
Mr Tennant continued: “The sector needs continued support. It will take time for established registered providers to regain capacity, and in the meantime new entrants should be encouraged and incentivised. There is no magic wand, but a more flexible environment is essential and urgent.”
The report has made the case for introducing new financial support, such as interest-free loans to bridge the gap between the amount that developers can afford to sell affordable homes for and the price that investors are willing to pay for them.
The report also called for adopting a US-style tax credits scheme to raise funds for new affordable homes, as well as promote public-private collaboration. Such a scheme was recently proposed by a coalition of housing bodies convened by build-to-rent landlord Grainger.
There were fewer than 4,000 affordable housing starts recorded in London in the year to March 2025, against a total new homes target of 88,000.
The report highlighted how the need for private investment in affordable homes has grown in recent years as housing associations have focused their financial resources on addressing fire safety and environmental requirements across their existing homes, which has limited their capacity to buy and build new homes.
The financial strain faced by housing associations has significantly reduced their ability to take on new homes through Section 106 agreements, which set out how many affordable homes a developer will deliver as part of a project. Close to half of England’s affordable homes are delivered through these agreements.
Meanwhile, pension funds and other types of private investors have begun to invest in affordable homes through for-profit registered providers. The number of homes owned by these providers has risen to more than 45,000 across England, up from under 15,000 in 2021, though only around 3,000 of these properties are in London.
Muniya Barua, deputy chief executive at BusinessLDN, said: “With housing starts at rock bottom, channelling more private investment into affordable housing is a necessity if we’re going to make London’s ambitious new homes target a reality.”
Rim Adem, associate director at CBRE, said: “London’s development landscape is in unprecedented territory and what is required now is a forward-thinking and innovative approach to unlock the delivery and funding of affordable homes.”
A spokesperson for the Mayor of London said tackling the housing crisis is the mayor’s “top priority”, but housebuilding has faced “a perfect storm” due to the legacy of the previous government, high interest rates, the rising cost of construction materials, the impact of the pandemic, Building Safety Regulator delays and the ongoing consequences of Brexit.
They said the mayor is working with government on a series of “time-limited, emergency measures to unblock housebuilding” and is exploring some release of London’s green belt and streamlining the new London Plan.
“The mayor will continue to work closely with the government, councils and developers to boost housing delivery as we continue to build a better, fairer London for everyone,” they added.
The Ministry of Housing, Communities and Local Government has been approached for comment.
Ballymore declined to comment further when contacted by Inside Housing Living.
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