The man who got rich off affordable housing

The Design Centre in London’s Chelsea Harbour is an unlikely base from which to operate a social housing empire. It’s an ultra high-end shopping mall for interior design, built in 1987 to cater to the international elite when they fit out their penthouses, hotels, restaurants and superyachts. Soothing piano music plays as I climb a spiral staircase, passing countless showrooms and a giant chandelier, to reach an office on the top floor.

I tell the impeccably polite receptionist that I’m here to speak to Giles Mackay. For the last three months I have been reporting on his affordable housing company, Heylo, which owns and operates 10,100 “shared ownership” homes (a type of affordable housing where you part-buy, part-rent your home from a social landlord) across the UK. Mackay, an entrepreneur who claims to have established 13 businesses, amassed these properties with debt, including at least £52 million of public money and £532 million from private investors. Earlier this year, something spooked the investors and they pulled out of the scheme. Now, Mackay’s portfolio is coming undone — and the cash he owes may not be recovered.

The receptionist’s answer is disappointing, even though it’s the one I expected. “He’s not in,” she says. “He lives in Monaco and comes into the office when his schedule allows.”

The crisis at Heylo has gripped the social housing world since March, when I revealed in Inside Housing that two asset-owning subsidiaries of the business had entered administration. Together these two companies own 3,450 homes, all of which are occupied and are now expected to be sold to new owners by the administrators. Heylo is therefore likely to lose a third of its homes at a stroke — and there is no guarantee they will end up in the hands of another social landlord. Residents have been assured that they will not lose their homes, but the administrators are not required to keep them in the social housing sector, so they could end up sold to a private owner.

Since they provide homes for people on low incomes, a level of responsibility is expected from social housing landlords. If you open your books to officials, and demonstrate good governance and sound finances, you can access the benefits of regulation including government grants to buy new homes. Heylo stretched this principle to breaking point. Mackay bought a dormant social landlord and created an elaborate structure where his homes sat in unregulated investment companies. The result was that Heylo could receive public funds and sidestep scrutiny, all while generating big profits. In its most recently published accounts, for 2023-24, the overarching Heylo Group recorded post-tax profits of £39.4 million. There is an extraordinary contrast between Mackay himself, whose personal life revolved around mansions and raucous parties, and his thousands of lower-middle income residents who now face an uncertain future. (Mackay was also approached for comment for this article by email.)

“There is an extraordinary contrast between Mackay himself, whose personal life revolved around mansions and raucous parties, and his thousands of lower-middle income residents who now face an uncertain future.”

Although it may be the most extreme example, Heylo is one of a wave of “for-profit” affordable housing landlords in England backed by billions of pounds in private capital. Should ministers be encouraging this? Are big profits compatible with providing social homes? This debate will only intensify as new investors flood in, lured by the government’s new £39 billion grant programme for affordable housing. Heylo’s unravelling is a reminder that however genuine these investors’ social purpose may be, their residents will come second and their returns will come first.

Giles Patrick Cyril Mackay, now aged 64, was born in 1962. He passed the bar aged 21 and quickly moved into structured finance. In 1985 he founded Assettrust, the first in a series of companies that would help businesses such as Ford and Sainsbury’s sell and lease back their properties. In 1999 he founded Hometrack, a property data business which he sold to Zoopla in 2017 for £120 million.

In the last 15 years, newspaper coverage of Mackay has focused just as much on eye-popping stories from his personal life as it has on his businesses. In 2012, a court ruled that he had bullied the contractors building his Chelsea mansion and was ordered to pay £2.3 million. “My middle name is relentless,” he had warned the builders in an email criticising delays and defects. “Guess what, when I have forgotten about you in a year’s time enjoying my £100m home or sailing on one of my 40 metre yachts — you’ll still be trying to wind up some other poor unsuspecting customer with your brand of mediocrity — a sad loser.”

Mackay’s former wife Caroline accused him of not revealing his full wealth following the breakdown of their marriage in 2015. After they divorced, he became notorious for hosting parties at his London…