In a significant move within the UK housing sector, Blackstone, through its affordable housing company Sage, has sold a portfolio of 3,000 shared ownership homes to the Universities Superannuation Scheme (USS) for £405 million. The deal, which marks Blackstone’s first sale from its growing UK residential portfolio, is the largest affordable housing transaction of its kind in the country.
USS, the UK’s biggest private pension fund with £77 billion in assets, has acquired the properties as part of its strategy to invest in the housing sector. The pension fund’s decision aligns with the government’s goal of encouraging greater private sector investment in critical infrastructure, including housing, as it grapples with financial constraints.
Shared ownership schemes have gained traction as a means to help individuals climb the property ladder by allowing buyers to purchase a share of their new home, with the option to acquire the remaining portion over time. However, critics argue that the process of buying additional shares can be cumbersome, and shared owners bear the full brunt of maintenance costs despite only owning a portion of the property.
The newly acquired properties will be managed by Sparrow Shared Ownership, a social housing vehicle launched by USS and chaired by David Avery, former chair of Clarion Housing. Sage, majority-owned by Blackstone and real estate investor Regis, has committed £3.7 billion to construct 17,000 affordable rent and shared ownership homes, with an additional 5,600 in the pipeline.
James Seppala, Blackstone’s head of real estate in Europe, emphasised the firm’s role as the largest provider of newly built affordable housing in the UK over the past three years. He stated that the transaction would enable Blackstone to continue investing capital into Sage Homes, helping to address the structural undersupply of housing across the country.
The UK private rental sector remains largely untapped by institutional investors, with only 2% owned by pension funds and insurers, compared to over 35% in Germany and the United States, according to Savills. As the government prioritises the construction of 300,000 new homes annually, increased involvement from the private sector is expected to play a crucial role in achieving this target.
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