City grandee set to spearhead affordable housing start-up

John Gildersleeve, the City and property industry grandee, has launched an affordable housing development company - Rentplus - in the latest sign that the social housing sector is opening up to mainstream real estate businesses.

The new group will finance and build affordable homes for let which tenants can choose to buy at a market price at a later date. Rentplus would help them on to the housing ladder by subsidising them with a 10 per cent deposit.

Rentplus has already agreed its first deal with Plymouth and Sedgemoor councils to build 900 homes.

It aims to have a portfolio of 5,000 properties by 2020, and is seeking to raise funding of £700m. It has secured £70m from a UK pension fund.

Tenants will be referred to the company by housing associations and councils, and offered five-year contracts, up to a maximum of 20 years. At the end of each contract period they will have the chance to buy the home. The homes will be managed by a social landlord on a day-to-day basis while they are rented out.

"We think this could be the Dyson of affordable housing," said Mr Gildersleeve, referring to the transformational effect that James Dyson's bagless vacuum cleaner had on that market.

Mr Gildersleeve, who is chairman of Britain's second-largest listed property company by turnover - British Land - will be chairman. He has a long record in the City, currently acting as deputy chairman of the Dixons Carphone Group, deputy chairman and senior independent director at Spire Healthcare and a non-executive director at TalkTalk. He has previously been chairman of New Look and EMI, and a director of Tesco, Lloyds TSB Bank and Vodafone.

The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused.

His move into the affordable housing market follows the recent appointment of Aubrey Adams, former Savills chairman and RBS global restructuring group property chief, as chairman of L&Q Group, one of Britain's largest social landlords. Mr Adams said that he wanted to "help to address the housing crisis".

Mr Gildersleeve said: "Home ownership is a universal ambition and it is becoming increasingly difficult in the UK today."

Britain needs to build about 250,000 new homes a year, he said; in 2013/14 it built just 160,000.

"We have a housing problem, and have had pretty much since the 1970s," Mr Gildersleeve said. "This is a secure, ethical investment [for its backers] and an opportunity to increase new housing through a new business model."

© The Financial Times Limited 2015. All rights reserved.
FT and Financial Times are trademarks of the Financial Times Ltd.
Not to be redistributed, copied or modified in any way.
Euro2day.gr is solely responsible for providing this translation and the Financial Times Limited does not accept any liability for the accuracy or quality of the translation