5 December 2011 | By Gavriel Hollander, Inside Housing

A landlord has moved to diversify its portfolio by buying a number of homes in the market rent sector.

Sovereign Housing Association has bought 84 homes to let at market rates in Bristol, Swindon and Gloucester. The 33,000-home landlord acquired the first tranche of 34 homes last year, with the next 50 being added more recently. Completed units have so far taken an average of two months to rent out.

The association said the move into the market rent sector came on the back of a Hometrack report last week saying that housing turnover was set to hit a 40-year low.

We identified a gap in the market and these homes have been let very quickly, due to the increasing demand in the private rented market and the high quality of the units we purchased,’ said James Gibson, regional development director at Sovereign.

Mr Gibson added that he expected the association to make more similar purchases in the coming years as an increasing number of tenants moved into the private rented sector.

Given the uncertainty in the housing market as demonstrated by the Hometrack report and the reluctance of purchasers to commit to buying new homes, and in light of the success of our first steps into the private rental sector, we anticipate that Sovereign will make further purchases in the future.’

Sovereign merged its four subsidiary housing associations into one entity earlier this year, in a move that it said would allow it to free up more housing stock to borrow against.