AHTO and banking giant Citi UK have unveiled a strategy to pour £1bn into social housing over the next three to five years.
The pair aim to buy 4,000 shared-ownership homes in London and regional cities and towns including Leeds, Bristol, Manchester, Reading, Dartford and Woking.
AHTO, which stands for Affordable Homes to Own, specialises in intermediate affordable housing under a rent-to-buy tenure. This allows consumers the option of renting and buying their homes at a later date.
AHTO was established last year as a wholly-owned subsidiary of Maddox Capital Partners, which is run by directors Ranjeet Sandhu and Jacques van Oorschot.
The investment manager is working with Citi UK to secure and structure institutional finance to buy new-build properties from housing associations and housebuilders.
AHTO will target investment opportunities of up to £150m, with schemes of up to 500 homes, including flats and housing in cities and commuter towns. Those properties will then be leased back to registered providers.
The strategy comes as institutional appetite for affordable housing continues to increase. At the same time, many housing associations and local authorities have sought bulk sales of stock to meet rising costs
Earlier this year M&G Real Estate made its first investment into the sector in a £500m tie-up with Hyde Group. The deal will see M&G acquire around 2,000 shared-ownership homes on behalf of a new fund with backing from local authority pension funds.
The partnership followed various other structures, for example Gresham House’s ReSI REIT, which specialises in buying shared-ownership from RPs and other institutional-backed funds targeting intermediate affordable housing.
Sam Senchal, chief investment officer at AHTO, said: “The only viable solution to the UK’s affordable housing crisis, without grant funding or subsidies, is to channel institutional investment into the market.
“The intermediate rent-to-buy model brings together our partners and institutional investors to deliver more affordable homes for families with less complexity and cost compared with current affordable home models.”
AHTO is advised by Knight Frank and Colliers.
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