US-based wealth manager Blackstone has extended exposure to Spanish residential property, closing the purchase of the firm FIP which owns almost 500 subsidised homes in the capital Madrid. Local media say Blackstone paid €54m.
A new breed of landlords is emerging on the global housing scene, and their impact is being felt from the United States to Europe. Transnational landlords, backed by powerful investment firms like Blackstone, are rapidly acquiring properties and mortgages, potentially locking millions of people out of homeownership for generations to come.
The domination of these transnational landlords extends beyond direct property ownership. In the US, Blackstone funds B2R Finance, which caters to investors with portfolios of between five and 500 homes. To ensure a reliable return on investment, Blackstone also invests in start-ups developing algorithm-driven technologies that assist landlords in finding the best properties to buy and the tenants to fill them. Smaller landlords are then compelled to purchase these technologies, further contributing to Blackstone’s profits.
These transnational landlords’ professionalization and financialization of the rental market pose a significant threat to first-time homeowners. A recent paper released by investment bank Morgan Stanley, advising its investors on the opportunities presented by buying up distressed housing to rent out, makes it clear that they consider first-time owners to be direct competition.
An investment expert, Simon Lack believes these new landlords are here to stay. “They wouldn’t bother developing the expertise to treat it opportunistically,” he said, emphasizing the need for political action to regulate them.
In Spain, Blackstone, which now owns nearly 42,000 rental homes and mortgages, has faced public outcry following a wave of evictions in Madrid. The city’s new mayor, Manuela Carmen, has taken action, overturning eviction orders for 70 families living in social housing and implementing measures to protect thousands more. While Blackstone has agreed to restructure mortgages on its books to allow more people to stay in their homes, its appetite for buying remains undiminished, as evidenced by a recent $54 million deal for 500 more subsidized homes in the capital.
Michael Byrne, a housing policy expert, notes that governments in most European countries and the US are too focused on the need for home building to consider the type of housing being built or who owns it. “The mainstream political discourse is supply, supply, supply and anything new built is a good thing,” Byrne said. “We know that we need more affordable rental housing, but transnational landlords won’t deliver that.”
As transnational landlords continue to reshape the global housing market, governments must recognize the potential long-term consequences and take action to ensure that affordable housing remains accessible to all.