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Peabody sells 327 shared ownership homes to for-profit
Large housing association Peabody has sold 327 shared ownership homes to a for-profit provider, Inside Housing can reveal.
Large housing association Peabody has sold 327 shared ownership homes to for-profit provider MTD Housing #UKhousingPeabody told Inside Housing it sold 327 do-it-yourself shared ownership (DIYSO) homes to for-profit MTD Housing.
DIYSO homes allow the buyer to choose a home on the open market, while the housing association takes the remaining equity and collects affordable rent.
The sale took place last year, but was yet to be reported. It comes at a time when for-profits are increasingly interested in buying occupied affordable homes from social landlords.
Peabody said the deal was done after a consultation with residents, and the income will be invested in improving existing properties and building more social and affordable homes.
MTD Housing is backed by the Pears family, who runs one of Britain’s largest property companies, with £6bn of offices, flats and shopping centres in London and the South East. MTD Housing’s ambition is to deliver 6,000 affordable homes through rent and shared ownership by 2030.
The shared ownership sale is also notable because Peabody recently raised concerns about the risk appetite of for-profits when they buy occupied homes.
In May, Ian McDermott, chief executive of Peabody, revealed that a for-profit provider pulled out of a deal with the landlord over homes with low Energy Performance Certificate (EPC) ratings.
“We had a very well-respected for-profit provider pull out on the day that a deal was due to be signed, because they decided that, within the portfolio they were buying, there were too many [homes rated] EPC D and below,” Mr McDermott said.
“Frankly, if you can’t deal with that level of complexity, then it’s not the registered provider in that circumstance that’s being cautious, it’s the lightning-fast private sector.”
Mr McDermott said that, in his experience, organisations hadn’t “move[d] at lightning speed” while engaging with third-party capital, and they were not risk-takers.
He also said the “frictional costs” of bringing in third-party capital were “enormous”, from getting lawyers to financial advisors.
“I think we could do a better job as a sector around co-ordinating, unifying and standardising the way that we engage [with the private sector], because everything at the moment is really heavy-going, bespoke projects,” Mr McDermott added.
MTD Housing was approached for comment on the sale.
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