Investment giant M&G has widened its focus from shared ownership to all affordable housing tenures, Inside Housing can reveal.
M&G affordable homes in Yapton, West Sussex (picture: M&G)
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Investment giant M&G has widened its focus from shared ownership to all affordable housing tenures, Inside Housing can reveal #UKHousingThe asset manager has expanded the remit of its shared ownership fund, which will now be called the M&G Affordable Living Fund.
It said the change will enable it to invest across a broader range of UK affordable housing tenures including affordable rent, social rent, intermediate rent, discounted market rent and private rented homes available to local residents and key workers.
Inside Housing understands the fund will continue to be managed by Chris Jeffs, who led the shared ownership strategy.
M&G launched its £300m shared ownership fund in 2021 as a for-profit registered provider, and exclusively invested in shared ownership homes. It currently has a portfolio of almost 1,700 homes, with a further 155 under construction.
M&G is backed by Homes England, local government pension schemes and its £130bn with-profits client fund, including its 500,000 UK clients who are invested in the £65bn PruFund.
Since 2021, M&G has struck shared ownership forward-funding deals with social landlords such as Hyde, Chelmer Housing Partnership and Park Properties Housing Association. Under the deals M&G’s for-profit provider owns the homes while the housing associations reinvest funds from the sale of the properties in their development pipelines.
The Affordable Living Fund forms part of M&G’s wider £3.5bn UK residential property portfolio, which also includes student accommodation, senior living and build-to-rent.
Chris Jeffs, manager of the M&G Affordable Living Fund, says: “Expanding the remit of the fund provides people with a wider range of high-quality, sustainably designed and affordable homes to live in that are backed by institutional capital.
“These changes build on over 20 years of residential investment experience, as clients continue to seek the attractive risk-adjusted returns property can provide through different strategies, alongside the benefits to communities and society through the development of more affordable homes.”
M&G’s decision to widen its gaze from shared ownership to other affordable tenures comes after Savills predicted in May that for-profits would diversify their involvement in the affordable housing sector.
Currently, 56% of homes owned by for-profits are shared ownership, but for-profits are increasingly looking at rented tenures, driven in part by the priorities of the government’s new Social and Affordable Homes Programme.
By 2030, Savills predicted that 26% of homes owned by for-profits would be social rent.
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