Housing associations are using the residential market slowdown to buy offplan units at a discount.
It has emerged this week that at least five are in the market to buy, with discounts of up to 20% negotiated.
Places for People, one of the largest housing associations in the UK, has bought all of Durkan Homes’ VII scheme in Stoke Newington, N16, a total of 40 one- and two-bedroom flats in an off-market deal.
The housing association had planned to buy nine key worker units as part of the developer’s affordable housing requirements, but ended up buying the 31 private units too. The flats were advertised for £190,000-£250,000.
Places for People intends to release all the flats to key workers in shared equity schemes.
It also emerged this week that a deal between Circle 33 and Barratt to buy 50 units off-plan at Royal Victoria Docks, E16, at a 15% discount had fallen through because it failed to receive English Partnerships funding.
And a deal between Peerless Housing Group and Barratt for the 34-unit Clock Tower scheme in Woking, Surrey, collapsed because the parties could not agree a price. Peerless was looking for a 20% discount.
King Sturge is looking for 20 offplan flats in Tower Hamlets for another housing association, and Berkeley Homes is negotiating a bulk deal with yet another at its Royal Arsenal scheme in Woolwich, SE18.
Daniel Durkan, managing director of Durkan New Homes, said: “We’re seeing that in outer London some associations can pay as much as the private sector for units because they can negotiate discounts on bulk deals. If an area is cheap enough, you get a discount.”
Drivers Jonas partner Richard Petty said: “Housing associations and developers are increasingly willing to do business with each other. Registered social landlords are coming under increasing pressure to deliver what they promised. They have plenty of cheap private finance, but some are struggling to deliver enough flats.”
References: EGi News 14/02/05
