The Heylo Housing Group, backed by BlackRock, has placed two of its investment companies into administration. According to the Guardian, more than £52 million intended for building and maintaining social housing is affected. The government’s Regulator of Social Housing (RSH) is now urgently seeking a rescue deal to protect taxpayers’ money.
One of the insolvent companies owes Homes England around £46.46 million in unsecured loans, the other £6.21 million. Homes England itself puts its total exposure at about £43 million. The funds came from the Shared Ownership Homes Programme, which ran from 2018 to 2023. Normally, such grants are reinvested into new social housing after repayment – but in the event of a collapse, the money risks being lost.
Experts say the case reveals serious flaws in the deregulation of the housing market by the previous government. It raises fundamental questions about whether it makes sense to lure new investors into social housing and to award public funds to profit-driven companies. For the RSH, which oversees 2.9 million social homes, this is an unprecedented challenge – the regulator has never before lost a property or public funds due to a default.
If no rescue is achieved, 3,500 social homes could switch to the private sector. The lost grants would have been enough, according to Homes England estimates, to finance around 500 new social rented homes. The RSH is now working on a rescue plan to secure the public funds.
Source: www.theguardian.com
