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INVESTORS ENTER SOCIAL HOUSING ARENA

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A leading property investment company will this week enter the social housing market, declaring itself ready to spe...
A leading property investment company will this week enter the social housing market, declaring itself ready to spend hundreds of millions of pounds on houses on behalf of pension funds and insurers.

The Guardian (Society, p43) reports that the arrival of the company, Quintain Estates and Development, could mark a sea change in the way social housing is funded.

The company's main interest is in market-rented schemes, which are aimed at people for whom housing associations have not traditionally catered, on grounds of social need, but who may nevertheless be stuck in poor-quality rented accommodation.

The approach helps create mixed developments and communities, very much in line with government thinking, and enables registered social landlords to spread their overheads and, crucially, make surpluses to cross-subsidise core activities.

Under Quintain's version, it will buy existing stock - freeing housing association grant tied up in the properties - or fund the purchase and refurbishment or the development of further houses and flats.

The units will be leased to the RSL on long terms with an option for renewal on the same basis. As the company puts it: 'The finance, therefore, may be considered as permanent.'

Norwich Union is said to have made£50m available for such schemes, but the insurer has already been working on just such schemes with other organisations. And Chris Laxton, NU's property investment director, says: 'Our relationship with Quintain is about RPI-linked investments in other spheres, more typically nusing homes, hotels or corporate sector lease-back deals.'

But Adrian Wyatt, the company's chief executive, is bullish about such schemes. 'I am confident that we can turn this into one of the principal parts of our business - probably the predominant part - within five or six years.'

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