At the start of the first lockdown in March 2020, the Government launched its “Everyone In” scheme to fund temporary accommodation for all rough sleepers in the UK. This bold response prompted Big Society Capital and our partners in social impact investment to come together to form a coordinated solution for tackling homelessness in the wake of COVID-19.
Just over one year on, we are thrilled to announce that, together with other investors including trusts and foundations, local authorities and pension funds, as well as support from public bodies, £80.4 million of additional funding has been generated for social and affordable housing funds. These will provide hundreds of secure and affordable homes for those sleeping rough or at risk of sleeping rough during the pandemic - and beyond.
Unprecedented Government support
We are delighted to work together with the Ministry of Housing, Communities and Local Government (MHCLG) to invest £30 million into this collection of funds managed by Social and Sustainable Capital, Resonance and Bridges Fund Management. This partnership between central Government and Big Society Capital is the first of its kind and will enable us to further build an evidence base for the role of impact investment to address housing issues going forward.
We are also pleased that additional investment has been raised by some of these funds from public bodies, including the Greater Manchester Combined Authority (GMCA) and Greater London Authority. This has enabled us to target investments into those local areas that have been amongst the most badly affected by the pandemic.
The strengths of social and affordable housing funds
Following discussions with fund managers in our portfolio and major homelessness charities to understand the underlying needs, it became clear that new investment into social and affordable housing funds would be one way for the social impact investment market to take on homelessness in the wake of COVID-19.
Social and affordable housing funds are increasingly being recognised as a sustainable solution to address a wide range of housing needs. For investors, they create stable, inflation-linked, long-term returns generated from government-backed income. Having already invested £130 million into these types of funds, we felt that we had a good understanding of the underlying models to address rough sleeping and homelessness, as well as these funds’ potential to move at pace to work alongside credible charity partners to provide affordable and high-quality housing, often with wrap-around support, for vulnerable people.
The new capital will support funds managed by the following managers:
- Social and Sustainable Capital (SASC): through its Social and Sustainable Housing (SASH) fund that provides flexible secured loan finance for experienced charities to provide both housing and a high degree of support to disadvantaged clients. The SASH fund doubled following a new close last year with increased commitment from Big Society Capital, CCLA Investment Management, Garfield Weston and Tudor Trust, as well as new investment from GMCA, Joseph Rowntree Foundation and Virgin Money Foundation.
- Resonance: through its newly launched National Homelessness Property Fund 2 (NHPF2) and Resonance Everyone In Fund (REIF). NHPF2 acquires and leases properties to charities for individuals and families at risk of homelessness. The fund will start acquisition in the Greater Manchester region with seed investment from Big Society Capital, GMCA and Greater Manchester Pension Fund, with the ambition to expand nationally. REIF follows a similar model and partners with national charity NACRO to deliver housing for rough sleepers in London. It has received investment from Big Society Capital and the Greater London Authority.
- Bridges Fund Management: through its partnership with the Ethical Housing Company (EHC), an ethical landlord that provides affordable long-term rented accommodation in the Teesside area. In addition to our investment, EHC also raised further funds from the Teesside Pension Fund last year.
Through ‘Everyone In’ the Government has taken huge steps working with local authorities and their partners to protect rough sleepers during the pandemic. This work has not stopped, and by the end of January, over 37,000 people had been supported into accommodation, with over 26,000 already moved on into longer-term accommodation. Research published in the Lancet shows in the first lockdown alone the programme prevented more than 21,000 infections and 266 deaths. We are humbled by the opportunity to partner with MHCLG on this lifesaving initiative, and are proud to support Social and Sustainable Capital, Resonance and Bridges Fund Management in providing long-term and stable housing that contributes to a lasting social change in the UK in the wake of the pandemic.
Our partnership with MHCLG also includes the delivery of a multi-year evaluation programme, which will provide a further evidence to understand the role of social investment in addressing rough sleeping and homelessness issues. We believe this could set a precedent for further collaboration between impact investors and the public sector to address housing and other entrenched social needs.