Directing capital to social housing
Cardano is working with leading social impact investor Big Society Capital to drive investment towards UK social housing – one of the fastest growing impact investing asset classes.
There are over a million (1) households on social housing waiting lists in England. A chronic shortage of social homes means there aren’t enough for the people who most urgently need them.
Local authorities need a significant amount of capital to combat this challenge – an estimated investment of £10bn to build 145,000 new social and affordable homes each year (2). With housing providers struggling to cover the shortfall, the housing crisis is one of the UK’s most critical social issues and provides a significant opportunity for private investors (3).
Through our partnership with Big Society Capital, together we aim to direct capital to socially impactful organisations, transforming lives by providing funding for affordable, high-quality homes for the people that need them.
- Direct capital to meeting critical social needs – focused on the UK’s social and affordable housing challenges
- Increase the supply of affordable homes
- Driving interest and scale in this asset class.
- Generate a market rate/competitive risk-adjusted returns.
Gemma Bourne, Managing Director at Big Society Capital, says: “Social and affordable housing opportunities offer investors the potential to address the supply challenge. Investment into these funds is growing and we predict that this market will reach £8bn by 2025. Investments in Big Society Capital’s portfolio alone (£187 million to date) are set to provide quality, affordable homes for 500 people.”
Geordie Cox, Senior Investment Manager at Cardano, says: “Our clients are increasingly focused on the impact of their investments on society and the environment. And so are we – we want to bring positive real world change to our clients’ investments and their portfolios. The investments we make and advise on for clients matter: they provide financial stability to thousands of pensioners across the UK and Europe, and impact the world we live in.”
“That’s why we invest sustainably across our portfolios, and why we are going further. We’re targeting private investments to provide our clients with strong, contractual yield alongside measurable social and environmental impact.”
Why is social housing important?
- The UK’s population has substantially increased in the past 10 years, leading to increased demand for all housing
- House-building levels have fallen to a record low for the past decade. This has contributed to the urgency for new homes at affordable rates.
- Rent and other housing costs have risen exponentially driven by higher inflation, so low-cost rents associated with social housing are critical to help balance this out
- It provides people with security. The stable tenancies given to tenants living in these homes provide vulnerable populations with stability.
In the past decade, there has been a total net loss of 165,000 social homes (2012/13 – 2021/22) (1).
Over 1.2 million households are on the waiting list for social homes in England. While almost 100,000 households are living in temporary accommodation, including 120,710 children (3).
- See our video Investing in a better society https://www.cardano.co.uk/our-approach-to-sustainability/