Tag Archives: Genesis

Genesis plans further private rented sector growth

Housing association Genesis is one of the small numbers of organisations from that sector that has committed to growth into the private rented sector.

The group is looking to build around one third of its 1,000 homes output a year for outright sale, or market rent, according to chief executive Neil Hadden. The balance will be its traditional affordable home format, or some form of intermediate tenure, usually shared ownership. It is already building projects to the private tenure formats in Chelmsford and Barnet, and is looking to exploit the government’s Build to Rent funding programme to advance projects.

Housing associations are – as a group – suffering. The grants being offered to develop homes for rental in the subsidised sector – to those on local authority lists – are reducing. They can borrow from the financial markets, but that has a greater cost long term. Or there are alternative parts of the housing market they can get into, to create additional revenue streams.

Among its peers, it appears that currently the majority of housing associations are shy of taking such a directly commercial move such as moving into the development and management of private rented sector homes. However, some others are getting involved, such as Thames Valley, which has set up arms-length subsidiary Fizzy Living to develop a private rented sector brand and portfolio of property.

Genesis looks after 33,000 homes across London and the south east, including 401 market rent apartments in the Halo tower development in Stratford, which the group sold to investor M&G in a sale and leaseback deal in 2012.

“The reduction in public subsidy for affordable housing has meant we’ve had to look at different ways of providing that subsidy,” Hadden told Property Week recently. “Getting involved in more commercial activities is one way of providing funding to bridge that gap.”

Genesis has already successfully tapped into the government’s Build to Rent funding pot, winning a £45.5 million bid in April this year, to help fund the development of 485 private rented homes – more here.

£45.5m Build to Rent deal agreed with Genesis Housing

The largest deal to date under the government’s Build to Rent deal has been signed with Genesis Housing Association. The agreement, the fourth under the government funding scheme, will support 485 homes being built in Chelmsford, Barnet, Newham and Ealing.

In each case, the built to rent homes will be part of mixed projects, alongside social rented housing(the lamentable phrase “affordable homes” is still being used in the press release) and homes built for open market sale.

The majority of the homes will be at the former Anglia Ruskin University site in Chelmsford, where Genesis plans 130 one bed and 113 two bed homes. At Grahame Park in Barnet there will be 196 homes, of which it is promised 22 will be three bed homes. There will be 25 units in Ealing and 20 in Newham.

London mayor Boris Johnson commented: “With London’s population soaring, and to help address a 30-year failure to build enough homes, we have set the most ambitious house-building targets in City Hall history. The private rented sector has a huge part to play in this. More well-designed, good quality homes to rent will help rebalance the capital’s rental market, improve services for tenants and stimulate new development and economic growth as well as providing the new homes that hardworking Londoners so desperately need.”

Build to Rent eventually promises £1 billion of lending to the private rented sector, in a series of loans that the government is providing to pump prime the PRS. The money is advanced on a site specific basis, and only on the proviso that it will be repaid with subsequent institutional investment, once the homes are fully rented. A

Until today, two projects in Southampton and Manchester are under way with Build to Rent support, while a third scheme covering 190 homes was signed last week. This will see Mill Group buying homes delivered by housebuilder Bovis Homes, and received an £8.77m advance. More on that here. These projects are from the first round of projects submitted for financial support. A second round of 36 further submissions was received earlier this year.

John Carleton of Genesis commented: “We are delighted to be partnering with the government to deliver a much-needed supply of high quality housing in London and Chelmsford via the Build to Rent programme. It will broaden the diverse range of housing solutions that Genesis offers to people from all walks of life.”