How Do Private Investors Work With the Homes and Communities Agency?
Government involvement in housing is typically centred on social housing. But private funders also work with the HCA on investment properties.
The purpose of the Homes & Community Agency (HCA) is to encourage development of private housing that is affordable and which enriches local communities. Historically, funding has come from the National Affordable Housing Programme, however part of the Agency’s work is to marry private investment with its projects. Current objectives include working with strategic land investment companies to bring projects to live, bringing empty homes back to use, continuation of the Mortgage Rescue scheme, restoring social housing in disrepair and supporting the FirstBuy affordable home ownership scheme.
The agency has been very instrumental in aggregating private investors with housing organisations. Included in this are the Get Britain Building programme, involving the Agency with the Notting Hill Housing Group and the Greater London Authority in a £90 million plan to rent 140 new rental units in London. The arrangement provides investors with income as well as capital growth, a combination not always found in to-let housing investments.
Another private-public investment programme is the Non Profit Growth Build to Rent Fund, which involves the Department for Communities and Local Government, the Homes & Communities Agency and the Greater London Authority.
These programmes are key parts of how the government is working to address the critical need for housing in the UK. London Mayor Boris Johnson is in full support of such efforts: “With London’s population expanding at record pace, we need to build around a million new homes in the next 25 years to meet demand and avert a possible housing crisis,” he says. “Increasing supply in the private rented sector has a massive part to play in this. Building new, well-designed homes to rent will also lead to a more balanced rental market for Londoners, as well as providing construction jobs and stimulating growth for London’s economy by making it an even better place to live and work in.”
Of note, rental housing has significantly grown since the financial meltdown of 2008. The Office of National Statistics reports that 3.8 million more people are renting today than in 2009. Investors see opportunity in both rental and to-buy development.
The HCA also works on land regeneration (remediation and reclaiming contaminated land), development of local infrastructure and public sector landowners. The goals of all investments made by the Agency are to contribute to overall economic growth, as housing is integral to prosperity and quality of life. Part of how the agency accomplishes that within the government’s “Plan for Growth” is to providing expertise on housing and physical regeneration.
All of this underscores the need to be creative on multiple fronts at addressing the critical housing shortage facing the UK. Housing is integral to economic strength as much as quality of life, both of which have suffered in the past several years. Private investment plays a similar role, as investors and homebuilders endeavour to develop new market-rate housing, for sale or to-let, in areas where the growing local economy requires it