Monday 13 May 2013

Aviva plans to enter the rented housing sector analysed


The FT’s Ed Hammond says that Aviva’s plan to enter the UK’s rented housing sector highlights a structural shift in the country's letting market at a time of acute housing shortage. He notes that people close to the plan have said that Aviva may do a deal with A2Dominion to take control of thousands of homes in London and the south-east of England. The deal would involve the groups launching a special purpose vehicle that would build a mix of social and open-market rented houses. Under the plans being discussed, Aviva would take control of a portion of the homes to provide seed funding for a private rented portfolio. Mr Hammond believes that such a deal would be welcomed by the government, as it has been keen to encourage institutions to become landlords as an alternative to buy-to-let investors. He also notes that until the late 1940’s insurers and pension funds were amongst the largest owners of residential property in the UK.

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