Major investor and three housing associations sign shared ownership deals worth £62m

From Hyde, M&G acquired 73 homes at the Eastman Village development in Harrow for £23m. The 2,000-home development is currently under construction by Barratt Homes, meaning M&G is directly funding completion of the homes.

The investor also bought 168 new homes across 23 sites in Essex from Chelmsford-based CHP in a standing investment deal. The homes comprise 126 houses and 42 flats and were built between 2017 and 2022.

M&G said the transaction would help the 11,000-home landlord to finance its significant development pipeline.

Finally, M&G bought 120 new build homes across 13 sites in the East Midlands and South East from PPHA, where the homes comprise 60% houses and 40% low-rise flats, with completion of all units expected in 2023.

The hybrid deal means M&G is forward funding the new homes, but PPHA is taking on the sales risk, M&G said. The sale will help to fund PPHA’s £60m pipeline of new shared ownership homes.

M&G’s shared ownership fund has been slow to invest following its launch in March 2021, with backing from Homes England, two local government pension schemes and two M&G client funds.

A long-term partnership with Hyde was agreed to fund a pipeline of 2,000 shared ownership homes, but the fund missed its initial goal to invest £500m in the shared ownership tenure before March 2023.

“The market has been really challenging over that period,” Chris Jeffs, fund manager at M&G Real Estate, told Inside Housing. “Once you do create platforms with the right partners, then we really believe there’s opportunity to scale quickly.”

He pointed out that there was growing demand for shared ownership properties in the UK following the closure of the government’s Help to Buy scheme earlier this year and rising mortgage rates.

Paul Edwards, chief executive of CHP, told Inside Housing that he was excited about “the doors that working with M&G can open that a medium-sized housing association by itself can’t”. He said he hoped to work together with the investor on “larger land purchases, having the confidence for us to take on something bigger than we would have done working in isolation”.

According to Savills, for-profit providers currently own 28,150 affordable homes – a 35% increase since March 2022 – and are forecast to add a further 9,300 homes to their stock by the end of 2023.

Alex Greaves, head of UK and European living at M&G Real Estate, said: “These latest strategic partnerships mark a crucial step in our journey to meeting the significant demand for the shared ownership model in areas of the country where it is most needed.

“It’s also a brilliant example of how the private and public sectors can collaborate to make a positive impact on an underserved market. We’re delighted to be working with Hyde again and look forward to long and productive partnerships with CHP and PPHA.”

Mr Edwards added: “Working with M&G, we have brought in more investment for new homes, while still providing our great local customer service for the homes M&G have purchased. We are looking forward to continuing this relationship so that we can proactively tackle the housing crisis together in the longer term.”

Guy Slocombe, chief investment officer of Hyde Group, said: “This deal demonstrates how this model allows us to accelerate the delivery of more affordable homes, while enabling us to quickly recycle the capital we generate into new schemes.

“By combining our expertise in managing homes well with the investment M&G offers, we are bringing new investment into the sector, and it is playing an important role in meeting the challenges of the housing crisis.”