Blackstone sells 3,000 homes in biggest shared ownership deal

Britain’s biggest pension fund has bought more than 3,000 shared ownership homes from Blackstone, the American investment group, for £405 million.
The purchase by the Universities Superannuation Scheme, which invests the retirement pots of half a million lecturers and researchers, is the largest affordable housing deal of its kind since the shared ownership scheme was created in 1990.
The fund is buying the homes from Sage, which is majority-owned by Blackstone alongside Regis Group, the property investor. Sage has grown rapidly since it was set up in 2017 and has spent nearly £4 billion to own 17,000 homes nationwide, about 11,000 of which are rented out at affordable or “social” rents.
The remainder are under shared ownership, a scheme designed to help people to get on to the housing ladder by allowing buyers who cannot afford an entire property to buy a share of their home with the option of increasing their ownership over time. They pay rent on the portion of the home they do not own.
This is the first time that Blackstone has sold any of its portfolio of UK residential homes. It also marks the second largest residential deal this year, beaten only by Blackstone’s own purchase of £580 million worth of new homes being built by Vistry, the FTSE 100 developer.
James Seppala, Blackstone’s head of European real estate, said the money raised from the sale to USS would be reinvested in acquiring more affordable homes. “Through Sage Homes, which was established in 2017, Blackstone has been the largest provider of newly built affordable housing in the country for the last three years,” he said.
“By deploying capital to fund the development of new homes, we are proud to have created an institutional-grade portfolio, which, in turn, has attracted more long-term institutional capital into the sector. This transaction will allow us to continue to invest capital into Sage Homes to help to alleviate the structural undersupply of housing across the UK.”
• Gen Z to boomers: your stories of life on the property ladder
The 3,000 or so flats and houses are the “seed” properties for Sparrow Shared Ownership, the new social housing company launched by the USS this week. Sparrow will be chaired by David Avery, who has sat on the boards of several housing associations over the past two decades.
The USS, which has £77 billion of assets under management, first invested in social housing in 2020 through Residential Secure Income, another shared ownership provider.
Eamon Ray, the head of private credit and alternative income at USS Investment Management, said that Sparrow would “provide further capital into the UK shared ownership sector”, which is likely to be well-received by politicians. The Labour government has committed to building 1.5 million new homes over the next five years. Developers think that is a “highly ambitious” target, which will need heavy investment from private capital to stand a chance of being achieved.
Less than 2 per cent of Britain’s rental homes are owned by big institutions, but the sector is becoming increasingly popular with pension funds, insurers and professional property investors. They have been drawn in by stable valuations and rental growth, which have been elusive in most other parts of the commercial property market.