US-backed social housing landlord returned €15m to investors ahead of sale

First Step Homes, a company that leased homes to local authorities for social housing, distributed €15 million to investors before it was sold for €70 million in April.The low-profile private housing investor was set up in 2015 by UK-based Trinity Investment Management and backed by US real estate investment firm TPG Angelo Gordon. In April, it was acquired by Irish mortgage-to-rent scheme provider Home For Life for €69.7 million.New filings by First Step Homes Ltd show the company distributed €15.1 million to its immediate Netherlands-based parent firm last year prior to the sale to Home For Life. The company entered the Irish market in 2015. It acquired homes in Dublin and other cities including Cork, Limerick and Galway, renovated the units and then leased them to the State for social housing.READ MOREAt its peak, First Step Homes had a portfolio of around 800 mostly second-hand homes in Ireland, which were then leased to councils for more than 10 years at slightly discounted market rates.This practice of leasing homes for social housing has faced heavy criticism from Opposition parties, including Sinn Féin and the Social Democrats, which have criticised the deals as a poor use of taxpayers’ money. Based on Department of Housing data, the State has agreed deals to lease around 10,000 homes on a long-term basis for €3 billion over their 25-year lifetime. Many of the homes are being leased for more than €2,500 a month.Last year, First Step Homes director Richard O’Boyle told The Irish Times the firm reduced its portfolio here to about 300 homes in recent years. [ Fall in number of units added to social housing stockOpens in new window ]The company began to divest from Ireland following a commitment by the previous government in 2021 to phase out long-term social housing leasing deals with private companies and funds by the end of 2025. Last year, Taoiseach Micheál Martin said the Government backtracked on its plan to phase out leasing homes for social housing. He said the Government needed to “pivot more strongly to getting private sector investment in the market” and take “very difficult political decisions” as it targets the building of 300,000 homes by 2030 – equating to an average of 60,000 a year.Following the comments from the Taoiseach, O’Boyle said First Step Homes was exploring the potential to expand again in Ireland. In April, it was confirmed the company was acquired by Home for Life, a company led by Paul Cunningham, Charlie O’Reilly Hyland and Max O’Reilly Hyland.