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30th April 2008
INVESTORS SEEK REFUGE IN AFFORDABLE HOUSING MARKET
Recent reports suggest the global credit crunch could stop housing associations from raising the estimated £15 billion private finance needed to meet government house building targets*.
Two Castles Housing Association, however, is championing the relationship between private investors and the affordable housing market and has worked in partnership with Assettrust Housing Ltd, a private property investment company, since 2005.
In a bid to provide even more affordable homes across the North without relying on Government grant or public money, Two Castles manages properties on behalf of Assettrust, including 43 new contemporary apartments at Pall Mall House in Manchester’s vibrant Northern Quarter, and 64 elegant apartments at Woodlands Village in Wakefield.
In the next few years, the Housing Corporation aims to fund 155,000 new affordable homes and is planning to allocate £8.4billion in grants. Housing associations will have to raise nearly double that amount on the private market.
Stephanie Murphy, chief executive of Two Castles Housing Association, says: “As the commercial property market continues to plummet, an increased number of investors will seek long term security in affordable housing.
“There are attractive business opportunities in social housing and the interest is there. Pension companies, for example, invest in the affordable housing market because the returns are steady, less volatile than from private residential housing and they are over a prolonged period of time.”
Frank Newell, property services director at Assettrust Housing Ltd, said: “We are in business to make home ownership affordable by selling properties on a shared ownership basis.
“We enter into an agreement with the buyer to lease the remaining share that we own to them. The buyer then pays a combination of mortgage and rent. They can buy further shares later, when their income increases.
“When a buyer purchases a third share, they will be able to buy the property outright with an income approximately half that needed without our service. This makes a real difference, especially to first time buyers struggling to get on the first rung of the ladder.
“We work closely with local housing associations, which manage our properties and provide services to our residents. We are proud to have a well respected housing association like Two Castles as our partner in the region.”
Stephanie Murphy added: “We’re committed to the provision of affordable homes in both urban and rural areas across the North where properties are in high demand, prices are out of reach for many people and availability is low.
“We look forward to continuing our work with Assettrust Housingwhich plans to fund 10,000 new affordable homes over the next five years - to effectively manage many more homes across the North.”
Two Castles Housing Association owns and manages over 3,300 low cost, high quality properties across the North, from Fleetwood in the North West to Berwick in the North East. It has offices in Carlisle, Kendal and Whitehaven in Cumbria, and in Newcastle upon Tyne.
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