- £10 million government grant to help deliver 215 housing units for individuals and families who are homeless or stuck in temporary accommodation.
- Social investor Big Society Capital to match with £10 million of its own funding.
- The announcement comes as affordable housing shortage exacerbated by cost-of-living rise.
Tuesday 10 January 2022: More families at risk of homelessness will be supported into safe, affordable homes thanks to £20 million of new investment into social and affordable housing funds, social impact investor Big Society Capital has announced today.
This will see £10 million of funding from the Department for Levelling Up, Housing and Communities (DLUHC) combined with an additional £10 million invested by Big Society Capital, to deliver 215 housing units for individuals and families who are homeless or stuck in temporary accommodation.
The investment will support National Homelessness Property Fund 2, which purchases and refurbishes existing housing from the property market and makes it available to people facing the housing crisis. Homes are rented to tenants at Local Housing Authority rent levels to ensure they remain affordable.
Managed by social impact fund manager Resonance, the fund provides tailored support from charities and housing associations to help residents maintain their tenancies, including addiction services, education and employment support and counselling.
The investment will fund homes for families across England with a particular focus in London, Greater Manchester and Merseyside.
The Government’s £10 million will be invested into the fund, with all money generated to be recycled and used for further housing projects.
The announcement comes at a time when the affordable housing crisis is expected to be exacerbated as a result of rising inflation and living costs – with the number of families who are homeless or at imminent risk of homelessness going up by more than 23% in 12 months.[1]
Social and affordable housing funds use private capital to fund safe, affordable homes – often for people experiencing challenging life circumstances - whilst also aiming to provide investors with competitive risk-adjusted financial returns.
This investment marks the second time the department has funded new homes in this way; following its grant of £15 million into a group of funds tackling homelessness in March 2021.
This was match funded by £15 million from Big Society Capital, and has already delivered 296 housing units; far exceeding initial targets of delivering 240 housing units by 2024.
Minister for Housing and Homelessness, Felicity Buchan says:
“Ending rough sleeping and homelessness is one of our major priorities and we are delighted to be working with Big Society Capital to help make this happen.
“Temporary accommodation is a last resort and while it ensures no family is left without a roof over their heads, we want families to be in secure, longer term accommodation as quickly as possible.
“We have devoted £2 billion over three years and it’s great to see this funding already making an impact, providing a new start and a stable home to many in need.”
Drew Ritchie, Investment Director at Big Society Capital, says:
“This is a growing market now worth nearly £4 billion. There is now a growing appetite particularly amongst institutional investors such as pension funds who are attracted by the ability to generate low risk returns alongside positive social impact.
“We’re pleased to see the government’s continued support for this growing movement – unlike a grant that can be used just once, the money will generate returns to be used again, therefore increasing the flow of capital into affordable housing.”
John Williams, Managing Director of Property Funds at Resonance, says:
“We know that decent and affordable housing makes a huge difference to people’s lives, providing them with the stability they need to feel settled and in control of their lives. The combined £20m investment from Big Society Capital and the Department for Levelling Up, Housing and Communities into National Homelessness Property Fund 2 will help to meet local affordable housing needs in London, Greater Manchester and Merseyside, where housing crisis means too many people are living in unsuitable temporary or emergency accommodation.
ENDS
Note to Editors
Drew Ritchie, Investment Director at Big Society Capital, is available for interview on request.
For further information, please contact:
Ian Young, PR and Media Relations Officer, Big Society Capital
iyoung@bigsocietycapital.com
Paul Handford, Communications Director, Resonance
07718 975684 / paul.handford@resonance.ltd.uk
About Big Society Capital
Big Society Capital exists to improve the lives of people in the UK through social impact investing. We unite ideas, expertise and capital to create investment solutions for the UK’s social challenges, supporting organisations that deliver both positive social impact and sustainable financial returns. So far, we have helped channel £2.7 billion* into investments tackling a wide range of problems such as homelessness, mental ill health and childhood obesity. To widen access to social impact investing, we have partnered with Schroders, a global asset and wealth manager, to launch the listed Schroder BSC Social Impact Trust plc. As the portfolio manager, we provide investors with high impact investments that contribute to solutions to social challenges alongside targeting long-term capital growth and income.
*As at end of Q2 2022.
About Resonance
Resonance’s FCA regulated fund management subsidiary Resonance Impact Investment Limited (RIIL) creates and manages scalable and diversified residential property funds, that provide life changing housing solutions for people facing housing crisis. RIIL also manages three enterprise growth funds and two community asset funds. These funds invest in social enterprises that support people to rebuild their lives, once they have an affordable home. Since 2013 our funds have raised in excess of £340 million, providing over 1,000 safe and affordable homes for around 3,000 people across the UK.
About National Homelessness Property Fund 2:
The fund was created to help meet the increasing demand for decent and affordable housing for people who are homeless or at risk of homelessness. It refurbishes properties before leasing them to its housing provider partners who let the properties to tenants, whilst also providing them with or signposting them to additional support to help them turn their lives around.
- Fund launched December 2020 with £20 million seed investment.
- First tenants housed summer 2021.
- Aims to raise £300 million.
- Aims to purchase 1,500 properties and to house 16,000 people over its lifetime.
- Housing partners so far include Let Us (currently made up of Salix Homes, Bolton at Home, Wigan Council, ForHousing and Stockport Homes Group) in Greater Manchester, DHI in Bristol, Response in Oxford, and Redwing in Merseyside.
- Other investors into the fund include Greater Manchester Pension Fund, Greater Manchester Combined Authority, Bristol City Council, Oxford City Council and Liverpool City Region Combined Authority.