Boss of large London landlord now ‘far less wedded’ to owning homes
The chief executive of a large London housing association has said he is not as “wedded” to owning stock as he used to be, as more landlords in the sector look to equity investments as a way of shoring up their finances.
Mark Washer, chief executive of Sovereign Network Group (SNG), told delegates at the National Housing Federation’s Housing Finance Conference the funding model that had worked previously should be reconfigured.
“We have to think more widely than we perhaps have in the past. The traditional model that has worked brilliantly for years is that housing associations buy or build and own the homes, and they own them in perpetuity,” Mr Washer said.
“We wouldn’t, as a sector, have delivered so much had that not been the model.”
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But the strain on social landlords’ finances was such that other options were now needed, he said.
“We do need to think about different forms of government investment, which might not simply be grant. It might be equity, it might be repayable loans, it might be some form of underwriting. We need all of these things,” Mr Washer said.
Discussing what Labour’s plans for funding affordable housing should look like, Mr Washer said the government did “want to come up with different solutions”, but must “be prepared to explode the model that has worked well” in the past.
“I am far less wedded to owning the assets that we buy or build than I have been for all of my time in housing, because otherwise, I think we’re simply not going to be looking at the opportunities,” Mr Washer said.
Rosemary Farrar, chief financial officer of Platform, agreed. “I think there is an opportunity to get in some more equity involvement.
“For housing associations who are clinging on to that old part of the model, I think that [time] has gone. It’s passed.”
Last week, Inside Housing reported that major landlords such as Peabody and Platform were looking to equity partnerships as a means of addressing the competing demands of development and investment in existing stock.
Priya Nair, chief executive of The Housing Finance Corporation (THFC), added a word of caution.
“Considering separating owning from managing underlying homes is a big change for the sector. Considering other types of funding and financing, not just from government, but also from private capital providers, is a change from where the sector has been,” she said.
“Some of the structures we’re thinking about from an innovation perspective need some assurances around what the governance looks like as a consequence.”
Understanding how the proceeds from new financing models were being used was crucial, too, she added.
Last month, THFC and the government’s National Wealth Fund announced a new unsecured debt facility to fund social housing retrofitting.
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