The funds will be used to allow Sage to buy private developers’ Section 106 allocations – a part of the Town and Country Planning Act 1990 that means property developers must offer something to the local community that will enhance the local area in return for the granting of planning permission for their development.
Sage has provided homes for more than 100,000 families across the public and private sectors, and claims to use “a long-term approach and significant new institutional investment [to provide] quality affordable homes at scale”.
The investment has sparked some fears that tenants could be outpriced as rents may be forced upwards in order to meet the targeted returns.
Tom Murtha, co-founder of SHOUT, which campaigns for more investment in social housing, said: “(Blackstone and Sage’s) purely profit motive is contrary to the social purpose objectives of most traditional housing associations.
“To make the return they need … Sage and Blackstone would increase rent beyond the means of those on low-income, in the greatest need.”
Building more affordable housing is now a top priority in Britain as the number of new homes being built has not kept up with demand, which has led to rising house prices and rents, as well as an increase in homelessness.
As the country continues to gear up to leave the European Union, some fear that a reduction in construction workers from the EU will cause major problems and make hitting Phillip Hammond’s ambitious targets impossible.