A housing association is launching a £750m drive into the private rented sector (PRS) to capitalise on the ‘pent up demand’ for rented housing in the north of England.

According to Inside Housing:

In a boost to the region, Your Housing Group will launch a new company next month with plans to develop two initial schemes totalling 265 homes.

It intends to use institutional investment to focus on areas in Manchester and Liverpool where it believes the young, mobile generation provides an ideal market for large-scale PRS.

Northern social landlords have not developed PRS housing in large volumes in the past, in part because market rents remain low in some areas.

Stephen Haigh, executive director of growth and development at the 33,000-home landlord, said: ‘I think there is a certain pent-up demand for PRS in the north. There is really no current offer except individual private landlords.’
He described the venture as ‘Fizzy Living for the north’ – drawing a comparison with the PRS company founded by Thames Valley Housing Association in London.

Your Housing has a pipeline of sites to develop for PRS and is approaching its existing lenders, institutions and potentially new lenders to fund the plans.

It is understood that 15,000-home association Liverpool Mutual Homes also plans to develop PRS homes in Liverpool. Northern landlords Symphony Group and Incommunities are also considering the viability of PRS schemes.

The move by Your Housing and Liverpool Mutual reflects a shift from the south following a deal by Manchester City Council in June that secured £1bn of investment from Abu Dhabi United Group to fund 6,000 homes in the city – a large number of which will be PRS.

Mark Davie, head of social housing at M&G Investments, said: ‘We all know there are parts of the north where demand is quite low and rents are quite low, but there are other parts that are absolutely thriving.’

James Pargeter, head of residential projects at Deloitte Real Estate, said making PRS schemes viable in the north could be easier than London because of low land costs.

Inside Housing revealed in March that some London landlords were abandoning or reducing PRS plansbecause of factors such as high land prices, static rents and soaring sales values.