Hyde set to hatch more for-profit RPs

Mr Slocombe said that Hyde – which manages around 50,000 homes – is considering its options, having spent around two years working on the AXA deal.

But he added: “We are beginning to talk to people about some new initiatives, but have no current applications in.”

Hyde’s deal with AXA has also involved launching a new development vehicle – Newton Development Partners – alongside Homes England. AXA IM Alts, the group’s investment arm, has taken a 50 per cent share in the vehicle, and Hyde and Homes England each have a 25 per cent share.

The vehicle is aiming to build mixed-tenure developments, which will then be offered to Halesworth.

At least half of the homes built will be classified as affordable, including social and affordable rent tenures, as well as shared ownership. The remainder will be market sale. Hyde will be responsible for identifying development opportunities.

It is AXA IM Alts’ first investment in the UK affordable housing space after reports earlier this year that it was aiming to increase its exposure in the region.

The firm is a division of AXA Investment Managers, which manages €887bn (c.£766bn) worth of assets globally and is regarded as one of the world’s largest asset managers. It is ultimately owned by AXA Group.

Mr Slocombe declined to be drawn on how much Hyde and its other partners would invest in the initiative, but he said the overall capital raised is likely to be more than a reported figure of £400m over the next 10 years.

As a group, the G15 landlord is targeting 20,000 new homes over that period, but Mr Slocombe declined to say how many of these would be through Halesworth.

Hyde’s tie-up with AXA IM Alts is the second agreement it has struck with a major investor in the space of 18 months. In March last year, the association signed a deal with M&G aimed at delivering £500m worth of shared ownership homes.

On the idea of taking institutional funding, Mr Slocombe added: “I think it’s beholden on traditional housing associations to modernise, and unless they adapt their funding model, they are in danger over time of becoming passive managers of ageing estates.

“We have to find ways of changing the model so that we’re well funded enough to ensure all of our estates, old and new, are well maintained, decent and safe. Funding has been pretty linear in the sector for such a long time.”

However, he acknowledged that taking this route is not for all organisations.

“What we’ve done with Halesworth and with M&G isn’t for everyone. And we get that. It would be arrogant of us to suggest that this is what everyone should do,” Mr Slocombe said.

“But if areas of the sector are struggling with financial resilience and are determined to carry on building, while also addressing the most important customer needs, then the sector needs to look at introducing a more flexible funding model.”