History of private finance into the sector
Although the modern form of the sector was first established by the Housing Act 1964, the principals of the social housing movement can be traced back much further.
Applies to England
A brief history
While Almshouses had been first provided to the poor, old or distressed from the 10th century (paid for at the time through donations to Christian institutions), the mid-19th century witnessed individuals including George Peabody, Octavia Hill and Nathan Rothschild motivated to tackle the slum housing that was widespread in English cities. Often starting with their own seed equity, developments attracted investors by offering a 4 or 5 per cent return despite rents being set at ‘affordable’ levels for the lowest paid people in society.
The early part of the 20th century saw central Government and local authorities take the lead in provision of social housing, while PRP’s concentrated on more specialised accommodation. However, their ability to efficiently build, maintain and operate low-cost rented property was clearly demonstrated and the Housing Act 1988 sought to leverage this capability by drawing in private finance to create ‘mixed funding’ schemes. The Act also included the possibility for local authorities to sell their housing stock to PRP’s, who would then raise private finance to fund works to bring these properties up (and maintain them) to a decent standard.
Over 30 years later, the sector in England had deployed just under £100bn in debt raised from banks and investors.
For our part, the benefits of maintaining good relationships with the lenders, investors, intermediaries, ratings agencies and advisors are very clear and we work hard to deliver protection both to the tenants and the investors.
Contact us
The Private Finance Team can be contacted by emailing Private.Finance@rsh.gov.uk.