For Profit housing is growing in England – what does it mean for Wales? 

‘For Profit’ Housing Associations and Wales


If you think keeping up with Brexit at Westminster is hard, you should try keeping up with social housing across the border in England!   It very different environment with very different policies. For example: 1) Right to Buy is encouraged by their Minister. 2) due to merger upon merger, a single English Housing Association may soon have more homes than every Housing Association in Wales put together etc. and a few landlords are viewed as more property developers than social landlords with social housing being less than a third of their overall turnover.

I could write a great deal on English Housing policy, but sometimes it’s like watching Jeremy Kyle – you don’t want to watch, there are always some unexpected twists and turns and sometimes you can’t help hiding behind a cushion!

Today, I’m just going to focus on ‘For Profit’ Housing Associations.

The last few years have seen significant growth in England of ‘For Profit’ housing associations.

At first, they were backed by Finance companies; venture capital funds or pension fund managers. The argument for ‘for profit’ is they have significant reserves of cheap money looking to invest in long term stable assets. They didn’t need to worry about begging the bank manager for a loan to build new properties, as they are their own bank manager!  They are seen in England as another route to building more affordable homes.

Blackstone and Legal & General PLC are the 2 big players but there a lot more now.  Critics complain that they can outbid social landlords for social housing element of a new housing development as new builds are easy to build/maintain/calculate rent returns and therefore look like a profitable investment option with good yields.  Perception is that ‘For profits’ have much deeper pockets, so can outbid traditional RSLs for land banks and new developments. Interestingly, England is also recently seeing private builders register subsidiary ‘for profit’ housing associations looking to develop their own 106 homes.

Their supporters would argue if they can build and manage efficiently,  and are bound by legislation on rent policy so what does it matter where any profit goes? 

I believe Social housing is more than bricks and mortar. We expect any surplus to be re-invested locally - not to shareholders.  ‘For Profit’ may not be as visible with regard local supply chain and support for tenant and community projects. Even a local HQ office can help support the surrounding economy rather than remote Head Offices. A search of website for Legal & General’s ‘For profit’ venture doesn’t show any visible content regarding tenant engagement and they certainly don’t have the stakeholder democracy of a Merthyr Valley Homes or a Cartrefi Cymru Coop.

Some English RSLs have been complaining that these new ventures shouldn’t be allowed to call themselves Housing Associations.  Currently these new players are voluntarily calling themselves   ‘[Name] Housing’  and dropping the ‘Association’   For example  Legal & General are calling themselves Legal & General Affordable Homes.

Also of note: Under ONS led de-regulation (including Wales), RSLs don’t now have to get regulatory approval to sell off stock.  An English HA recently sold a sheltered housing complex to a ‘for profit’ housing provider. How would you feel about that?

So what about Wales?

An article in Inside Housing recently said that the Scottish Housing Regulator has declined registration of a number applications from ‘for profit’ providers as it’s not permitted under Scottish Regulation but stated ‘for profit’ associations were allowed in ‘England and Wales’. Really?  That got me thinking.

I wanted to check this ‘England and Wales’ comment mentioned in Inside Housing – was this true?  or was the journalist just lumping Wales in as an afterthought, like the England (and Wales) cricket team.

I asked the Regulatory team at Welsh Gov regarding the position of ‘for profit’ /private Housing Associations in Wales:  

Q1) Are ‘for profit’ housing associations allowed to register in ‘Wales?

Q2) Have any applied in the last 3 years?

Q3) if so, and they were accepted, could you name them?

Welsh Gov’s Regulatory Team were very clear:  Welsh legislation is does not allow profit making RSL’s to be registered in Wales. Fact.

They even sent me a link that said that:

So, unless we see a change in Welsh law, they can’t operate in Wales, whatever you think of them.

However Welsh Government are currently exploring all options for increasing the Housing Supply including a variety of new ways to inject alternative finance models into Welsh housing.  Could this be option?

Do you agree on the ban? Or welcome alternative models? Let me know.

Final point on RSL registration:

Out of interest, Welsh Government have not registered a new RSL in Wales for many years now.  They do get occasional enquiries, but none have got as far as an actual application, therefore the Regulation team have not granted or refused a registration for some time.



Chief Executive, TPAS Cymru