COMMENT: Housing associations don’t always enjoy what you might call a glamorous reputation. However, this can be misleading. We have been around for a long time and have often been at the cutting edge of developing impactful housing solutions which prove to be a force for good.
A case in point was our setting up of the build-to-rent business Fizzy Living, which has been instrumental in establishing BTR as a hugely influential model for the UK’s private rental sector.
The bruising aftermath of the financial crisis combined with Britain’s long-standing housing crisis meant that many young professionals in the late 2000s and early 2010s were unable to afford to buy a home. They were often left with the only choice of renting substandard housing. Fizzy Living blazed a trail, providing an innovative new solution to the problem.
We at Thames Valley established Fizzy Living in 2012, offering private tenants the ease of renting quality housing allied with professional management. Fizzy would build or buy residential sites, and then rent them out directly to tenants. It would be a private landlord for the properties, managing everything in-house, professionally. This model was the first example of BTR in the UK.
Stakeholders quickly realised the immense growth potential of this model. The Ministry of Housing, Communities and Local Government set up a PRS task force, with a £1bn fund launched in 2013 to support the sector.
Today, BTR is the fastest-growing sector in UK real estate. Supply of BTR housing has increased by more than 50% since 2015, according to JLL, and the sector already accounts for 6% of all housebuilding. Investors continue to recognise the growth potential of BTR, evident through the record investment in 2021. If the UK BTR market matches trends already seen in the US, it has the potential to grow up to 10 times in size.
The time is right
Having laid the foundations for a thriving BTR market, the time is right for MTVH to sell its minority stake in the business, and to use its pioneering spirit to forge new paths.
This is a spirit which is in our DNA. The very origins of MTVH lie in addressing the desperate need to provide decent housing to the Windrush generation, which arrived on Britain’s shores in the 1950s. Denied access to housing lists while racist landlords refused to offer tenancies to them, these men and women, arriving to help repair the damage of the Second World War, were left with only the poorest-quality housing.
But the ancestors of Metropolitan Thames Valley took a stand. The precursor to MTVH was founded to provide quality, affordable housing for London’s Caribbean community. By 1968, Metropolitan Housing Trust had 200 homes under management, with another 560 in development.
MTVH has continued to strive to help solve the big questions facing our society. That’s why the proceeds from the Fizzy sale will be used to provide much-needed affordable and sustainable housing.
Once again, Britain’s housing industry faces stern challenges. Millions of people cannot afford to own homes as prices spiral out of control. And the damaging impact of climate change will devastate the world that we leave to our children.
Twin challenges
Over the next five years, MTVH will deliver 5,000 new homes, with the vast majority of these earmarked for affordable rents or shared ownership.
MTVH will also ensure sustainability is a core element of every part of the development process. The construction industry is a major polluter, responsible for more than a third of the UK’s emissions. We recently raised £250m to build new homes which meet the highest standards of sustainability.
Each of our new homes will be constructed to Energy Performance Certificate B or higher, helping the real estate industry to take strides towards meeting the UK’s decarbonisation agenda – while potentially saving residents hundreds of pounds in energy bills.
While the sale of Fizzy Living represents the end of a successful chapter, it opens the door for another to begin. I am confident that our innovative approach will once again provide meaningful answers to the twin challenges posed by affordability and sustainability to housing in this country.
Geeta Nanda OBE is chief executive of MTVH and chair of the G15 group of London’s largest housing associations
