Number of homes owned by for-profit providers up 35%

For-profit registered providers now own almost 30,000 homes in England, 35% more homes than they did in March 2022, according to the latest research from Savills’ research. 

Savills said for profit provider now own 28,150 affordable homes, more than double the number owned in March 2021.

The study found they are expected to have a further 9,300 properties by the end of this year, which would take total stock up to about 37,500 homes. By 2028 for-profit registered providers (FPRPs) will own 113,000 homes, Savills’ annual survey of the sector predicted, a reduction on the numbers previously forecast. 

The figure of 113,000 is likely to be reached following “greater levels of activity from new entrants”, however, the “rising cost of capital and stick inflation may act as a constraint to future growth of existing FPRPs”.  Savills forecast in 2021 the sector would deliver 130,000 new homes by 2026.  

Helen Collins, head of Savills Affordable Housing Consultancy, also noted that the survey found housing associations were “becoming much more comfortable and willing to engage in partnerships with FPRPs”. “This shifting sentiment has coincided with constrained sector financial capacity, leading to more potential for partnerships and collaboration,” she said. The survey found 89% of housing associations would consider a partnership with a FPRP, which is up from 62% in 2019. 

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“Housing associations face an almost perfect storm of increased demands on their finances to improve existing homes, while continuing to provide more affordable housing,” Collins explained. “As a result, bringing new sources of finance into the affordable housing sector has become ever more important.”

The ‘Private Capital and Affordable Housing’ report said that while FPRPs had traditionally relied on gaining stock through section 106 from developers “there is growing interest in acquiring older legacy stock too”. It added: “This will become important as housing associations increasingly seek to recycle capital from stock sales to fund development and investment.” 

The report also pointed out shared ownership “remains a key focus for FPRPs”, with 59% of their stock being made up of this tenure and this proportion likely to rise to 63% in five years’ time.   

There are now 69 FPRPs, Savills said, and a further 30 have applied to register. The agent said 90% of the FPRPs said they would hold stock over the long term and had no plans to exit the sector in the next 20 years.