This month, several articles appeared side by side referencing institutional ownership of different types of housing assets.
On the one hand, we have BTR set to account for over 250,000 homes, despite starts and the rate of growth slowing.
On the other side of the coin, JLL's affordable housing report states that at the end of 2022, investors owned 26,400 affordable homes, mostly by just four providers — with 10,000 units alone owned by the biggest, Blackstone-owned Sage Housing.
The paper also predicts that institutional ownership will double over three years, growing to 58,100 homes by the end of 2025.
The rise of affordable housing is of course a good thing. But with Michael Gove stating that he'd like to see at least 30,000 affordable housing units delivered each year (wouldn't we all?), the fact that the institutional sector doesn't even own this much yet rings very real alarm bells.
Sadly, the affordable housing sector is small fry, thus it's not surprising that its growth will outstrip others; we are coming from a tiny base with total affordable housing today smaller than post-war decades.
Meanwhile, institutional talk is all about ESG and 'social impact', with substantial weighting specifically for these in their portfolios.
Again, this is not a bad thing, but it's easy to invest in a sustainable BTR project that mixes new-build, modern technology with premium rents and amenities.
What about pivoting the social impact weighting towards the hundreds of thousands of empty housing stock nationwide that needs converting, repairing, or upgrading to make safe, healthy housing for the UK families living in substandard rental accommodation — not to mention those in temporary accommodation without secure tenancies and the 271,000 people classified as homeless?
There are specialists out there who can help private institutions set up as for-profit registered providers, no matter how big or small.
As the name implies, there is actually profit to be made and it's a hugely satisfying role to have.
Institutions could transfer their lessons learned in BTR to social housing which is in desperate need of more amenities and a better quality of housing from those who understand and offer good levels of customer service.
After all, tenants deserve a positive living experience, no matter their tenure.
We are sure there are plenty of brilliant examples of best practice out there that the bigger institutions not currently in the social housing sector of the market can learn from and take ideas.
It makes sense for social impact operators to collaborate, not compete.
Surely that would have a bigger impact for the housing market and really move the dial.
