Blackstone, the US private equity group, sold over 3,000 shared ownership homes to Britain’s largest private pension fund, the Universities Superannuation Scheme (USS), in a £405 million deal. This transaction marks a significant move by big investment companies in the UK housing sector. It is one of the biggest in the UK housing sector this year and the largest involving shared ownership homes since the scheme was created in 1990.
Shared ownership schemes allow individuals who cannot afford to buy a home outright to purchase a part of the property, with the option to acquire the remainder in the future. Blackstone has been significantly investing in rental and social housing in the UK, betting on long-term returns in a market where demand far outstrips supply amidst a long-running housing crisis. The firm sold the homes through its Sage Homes vehicle, a housing joint venture with private equity investor Regis Group, launched in 2017.
Blackstone transfers 3,000 homes to USS
The portfolio covers 250 Sage Homes sites across the UK. USS has launched Sparrow Shared Ownership, a registered social housing provider, to manage the homes.
James Seppala, the head of real estate Europe at Blackstone, stated that the company had “created an institutional-grade portfolio which has, in turn, attracted more long-term institutional capital into the sector.” He added that the sale proceeds would be reinvested in Sage Homes to help alleviate the UK’s housing undersupply. Through Sage Homes, Blackstone claims to be the country’s largest provider of newly built affordable housing over the last three years. Sage Homes has committed £3.7 billion to fund the development of 22,600 affordable rent and shared ownership homes, with over 17,000 already built.
Despite this, institutional investment in UK housing remains modest compared with the US and continental Europe, making up just 2% of the total rented stock, compared with more than 35% in Germany and the US, according to Savills.
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