After the government slashed funding to housing associations, many have moved into market sale and market rent properties to fund their affordable housing operations.
Genesis Housing Association provides or manages 33,000 homes in London and the South East. In 2012, M&G Investments agreed a sale and leaseback on 401 market-rent apartments in Genesis’ flagship tower, Stratford Halo, near the Olympic Park — one of the first institutional moves into the PRS.
Hannah Brenton speaks to chief executive Neil Hadden to find out what Genesis plans to do next.
How do market rent and market sale housing fit into your portfolio?
We pride ourselves on having a wide range of property tenures and products in our portfolio, from supportive housing and temporary housing, through to market rent and market sale properties.
Have they been playing a bigger role since the change in funding?
They have been playing an increasing role over the past five years or so — it is part of the changing business model that we have had to adopt. The reduction in public subsidy for affordable housing has meant we’ve had to look at different ways of providing that subsidy. Getting involved in more commercial activities is one way of providing funding to bridge that gap.
How does that work in terms of a split between the different categories?
Our development programme is predicated on the basis of if we build about 1,000 homes a year, which is our current ambition, a third of those homes will be for affordable tenures, a third will be for intermediate tenures such as shared ownership and a third will be for outright sale or market rent.
Are there any examples of schemes that fall into the latter third?
We’ve got schemes being built at Chelmsford, and Zenith House in Barnet which are coming to completion this year, and we have allocations under the government build-to-rent programme to build more.
In terms of a broader development strategy, where do you look for opportunities?
Our core area is London, Hertfordshire and Essex, so we would be looking at sites within those areas where we can add value by developing projects which will have a sense of place and will be mixed tenure.
Do you think going forward housing associations are going to have to keep developing non-affordable housing?
I think for some associations it probably won’t be appropriate for them to undertake market rent or market sale activities. But for larger organisations, which are able to spread the risks and have the
skills and experience to manage the risks better, yes, it will be part and parcel of their business model going forward.