#242 Grainger's Michael Keaveney on Build-to-Rent and a radical fix for social housing

Michael Keaveney, Director of Land, Development and Acquisition at Grainger PLC, has spent nearly eight years helping to reshape the country's largest listed landlord into a focused, operationally driven Build-to-Rent specialist. In a wide-ranging conversation for Propcast, he covers the logic behind Grainger's in-house model, the progress of its joint venture with Transport for London and a detailed proposal for how social housing in England might realistically be funded.

Keaveney arrived at Grainger two years after chief executive Helen Gordon, stepping into a business in the process of significant transformation. From a standing start of one delivered scheme in Barking, the business now has 9,874 BTR homes across England and Wales, underpinned by an operational platform built on a deliberate decision to keep operations in-house. "All of the staff in the buildings that we developed are our staff, they're Grainger people," Keaveney explains. "It gives you absolute control over the product that you're delivering and the customer relationship." The result is a business running typically at 96 to 98 per cent occupancy. "If you don't control that relationship in-house, it's very difficult to get to that data," Keaveney says.

He is also clear about what Build-to-Rent actually is. "People misunderstand what Build-to-Rent is. It's not about buildings at all. It never was. It's about service and product," Keaveney says.

The joint venture with Transport for London, operating under the Connected Living London banner, has taken longer to deliver than either party originally envisaged. COVID and the second staircase consultation both intervened. Keaveney is unapologetic about the decision to pause. "A single staircase building is perfectly safe, that's our view, it always will be my view if they're well-built and well-maintained," Keaveney says. He adds, on the question of proceeding with consented single-staircase buildings regardless, that Grainger will always build to the latest regulatory standard, and in the case of recent TfL schemes went back into planning with revised schemes to update them in line with the latest regulations. The revised schemes are now moving through procurement, with contractors on board for several. "We've got 1,500 homes at the moment with planning consents," Keaveney says, adding that the JV has also begun forward funding elements alongside housebuilders such as Barratt Redrow. Keaveney goes on to describe the broader TfL land bank as "untapped," though the binding constraint remains the same.

"The big question really is to what extent, how much grant support do these developments need to make them viable?" That question of viability runs throughout the podcast discussion. On the comparison between Build-to-Rent yields and Gilts - ultimately the question of risk-reward in the sector, he is equally direct. Comparing the two, he says, "is a category error." "A nominal Gilt doesn't grow. It's not indexed. We've got growth inherent in the Build-to-Rent model," Keaveney says. The correct comparable, he argues, is the index-linked Gilt. "We're not in the game of second-guessing that the growth rate is going to be, for some reason, structurally different in the next 10 or 20 years," Keaveney adds.

The political backdrop is, Keaveney acknowledges, genuinely difficult. He accepts it is "a difficult political sell" to be seen granting concessions to the private sector, tracing the problem back to a narrative that successive governments helped create. "The original narrative was entirely wrong," Keaveney says. "They've boxed themselves into a position whereby developers and private equity and private capital investing in housing is an inherent 'evil'."

When regulation and cost make the baseline hurdle rate unachievable, he notes, development simply stops. "The private sector goes, 'Well, by the way, it's no longer viable. And so we won't be building,'" Keaveney says. He is equally frustrated by the failure to interrog