A UK social housing success story
NEW ZEALAND PROPERTY INVESTORS have much to learn from those in other countries where governments have already established state and social housing investment models. With a portfolio of around 800 properties, Kevin Green (keynote speaker at the NZ Property Investors Federation conference last year) is the UK’s biggest private residential investor. Of those 800-odd properties, nearly a third are in social housing, mainly in South Wales, South Scotland and Northern Ireland.
Although Green is now a wealthy business owner, earlier in his career when he was booted out of home, he became homeless. So caring for tenants with misfortune through providing social housing fits neatly with his psyche. He also invests in social housing because it makes good financial sense. The reason Green first became interested when registration came into the UK in 2011 was because it looked “advantageous for passive investment”. He found once he had set up, there was “no work whatsoever” involved. “Because my tenant is actually the local authority, not the occupant, that attracted me,” Green says. “For return on investment, anything that’s safe and doesn’t require much time, I’m keen on. It ticked all the boxes.”
But social housing is different in the UK. The government there looked to private sector landlords for the capital cost of buildings but they provided the lease arrangements. Says Green: “We hold the buildings but the government has a long lease with local councils, either directly through the council or through private, non-profit-making housing associations. It works well for the government because they don’t have to outlay the capital costs – everybody wins.
“The government provides housing free-of-charge to tenants – only to those at their wits end,” Green says. “They have to stick to certain conditions; for example, they have to get part-time work, otherwise support stops. But we don’t have to worry because the government sorts out payment and the eviction. Rent is paid direct to us. That’s very important.” To provide social housing accommodation to housing associations, private property investors must become registered social landlords. They must have spent two years working with housing officers doing mandatory training to become licensed. As a result, landlords get good access to great systems.
To find out about more about Kevin Green and his portfolio of around 800 properties click here to get the digital issue.
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