Hyde chief says finding the right private capital partner is a ‘win, win’

Mr Hulme said that in Hyde’s case with AXA, it generates revenues for pension funds and this is good for both the UK, providing savings for pensions, and the social landlord as it “gives us the cash to do what we need to do”.

On partnerships, he added: “Cultural alignment is really, really important. And we’ve seen that by partnering with long-term investors, people who want to hold the investment for 20, 25 years – pension funds being a great example – it really aligns to our purpose, to give you a home to stay in and thrive in.”

Mr Hulme added that landlords do not need to be a large organisation in order to partner with private capital, but do need a “slightly different skill set”.

Rob Beiley, partner at law firm Trowers & Hamlins, said that for him, the question is “not about whether or not the housing association sector should be getting comfortable with for-profits”.

“It’s actually about how we can harness the institutional investment that wants to invest in the sector with the housing association sector to deliver more,” he said.

“There is a very, very clear desire on the part of pension funds, insurance companies, and in particular the local government pension schemes, to invest in social housing.”

Mr Beiley, who helped launch the British Property Federation’s new for-profits code of governance, said it is “simply not true” that a housing association has to be of a certain large size to engage with the for-profit sector.

“We’ve done a lot of work with small and medium-sized housing associations that could be selling stock to a for-profit to release capital for an economic programme or investment in existing stock,” he said.

“It could mean a for-profit taking over Section 106 schemes that you can no longer afford on your own balance sheet but can carry on managing it.

“It could be a partnership with a for-profit where they buy the residual income from a shared ownership development programme that enables the housing association to recycle that capital receipt into additional stock.

“There are different ways that housing associations can partner with the for-profit sector, there’s no one-size-fits-all model.”

Catherine Webster, chief executive of Thriving Investments, the fund management arm of Places for People, which acquired for-profit registered provider Rosewood Housing in March, said that to deliver 300,000 homes a year private capital is needed.

“If we’re going to do something about creating those 300,000 homes, you need to address private capital and bring it in,” she said. “There’s no way that you can do that without private capital.”

Chris Newman, associate director at Savills, said that private capital in the sector is “absolutely here to stay”.

He said that for-profits are in a “really strong position” to compete for tenanted portfolios being sold by traditional housing associations, as well as to complete and help assist with bringing forward new developments.

“The volume of stock we’re seeing transacted with FPRPs [for-profit registered providers] has grown exponentially over the last three years,” Mr Newman said.

“And we see that as continuing unabated growth over the next three, four, five years.”

Rizwan Khan, head of investment and partnerships at Blackstone-backed for-profit Sage Homes, said that it is “really keen” to continue to work with traditional housing associations and do more through partnerships, like Section 106 acquisitions.

“We are certainly still in growth mode,” he said. “We’re not affected by fire safety matters to existing stock, damp and mould issues which traditional RPs are facing and equally, we offer quite a good source of equity capital to deploy.”

Mr Khan said that the growth of for-profits is part of “the next stage of evolution” in the sector.

“The for-profit sector can deliver at scale and pace and provide good-quality homes for residents,” he said.