Private funding option explored by UK housing associations

 

Significant changes could be afoot in the UK property industry as housing associations have been looking at the possibility of becoming privately-funded companies. The option has been explored as a way to protect the industry against the possible end to funding from the government.

In an article on the Financial Times website it was reported that the leading social housing associations have been in discussions already with advisory firms such as KPMG and BDO. The aim of these talks has been to weigh up how viable the option of private funding would be as opposed to relying on government help, something that has always previously been used.

The option of alternative means of funding has already been delved into by the UK’s housing associations as £4billion was generated in the bond markets in 2012. This was a highly significant occurrence as the amount raised for the year was nearly four times as much as the previous record.

Housing associations are said to be considering a number of other alternative funding methods including raising social housing rents, building a greater amount of private rented homes, and turning to equity investors. Places for People is among the biggest property management companies in the UK and the association’s finance director Simran Soin said: “We are working off the assumption that there will be little or no grant funding at all after 2015.”

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