London housing associations are to enter the private property market on a big scale for the first time in order to provide affordable rental properties.
The G15 group of the top 15 housing associations, providing for one in ten London residents, is working to build 13,000 affordable properties by 2015 along with 4,000 properties for rent at market prices and a further 1,100 homes for sale, the Guardian reported. The profits will be used for further affordable housing.
A paper from the group reads: “The average home in London costs more than £400,000 and is 15 times the median income for Londoners – the highest in Britain. And while wages are higher too they are not nearly high enough to allow most people to meet their own housing needs … Younger people are increasingly priced out of home ownership and find renting takes a growing portion of their salaries. Those without access to capital may become lifetime renters.”
Housing associations have said they would be well suited to enter the market due to their already established standards of quality.
Geeta Nanda, chief executive of Thames Valley Housing Association told LondonlovesBusiness.com that such groups are “ideally placed” to help the private property market.
“Housing Associations have been around for many years and have seen their role change dramatically over that time. They have often been involved where markets have failed. They are ideally placed to provide market rental property and innovate by building suitable properties for the rental market as exist in The States and in Europe.
“Housing Associations have both development and management skills and are ethical and transparent businesses that are customer focused.
“We can respond to professionalising the sector but we need some help from government such as a private use class for larger PRS schemes so we can compete with developers to build these schemes and bring in the institutional investment to support the growth.”
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