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Fund launched to help charities buy homes from housing associations
A £26m fund has been launched to help charities buy homes to accommodate vulnerable people, including properties belonging to social landlords.
Social investor Social and Sustainable Capital (SASC) said its Social and Sustainable Housing LP fund will pay for homes for people with complex support needs.
It hopes to raise £100m over the next 10 years, with a target of helping 30 third-sector organisations house 10,000 people.
Ben Rick, managing director of SASC, told Inside Housing that organisations such as homelessness and domestic abuse charities will be able to access up to £5m through the fund to purchase, renovate and adapt properties to house their clients.
Over 10 years, the charities can take rental income from the homes, allowing them to secure separate finance, while SASC absorbs the risk.
At the end of that period, they can either pay SASC 85% of what the homes are worth or hand back the keys to the properties.
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“We are speaking to 26 third-sector organisations and a few of those are talking to housing associations looking to move out of non-core housing operations – they are giving those charities the first look on taking over those assets,” Mr Rick added.
“The aim is to create a sector of charitable landlords to address the gap that has opened up for more vulnerable individuals with complex needs to be adequately housed.”
Hull Women’s Network, which provides homes for vulnerable women and their children, will be the first charity to borrow from the fund.
Lisa Hilder, a trustee of Preston Road Women’s Centre where Hull Women’s Network is based, said: “We are delighted to be named as the first investee of this groundbreaking new fund.
“We have worked with SASC for the past four years and helped to pilot this innovative approach to creating safe homes for women and children fleeing violence and abuse.
“This investment will enable us to offer safe homes to an additional 49 families in the next 18 months and help them rebuild their lives.
“The funding will also increase the financial resilience of our organisation.”
Nineteen investors have committed capital to the fund, including the Esmée Fairbairn Foundation.
The foundation’s chief executive Caroline Mason said: “For many charities and social enterprises, meeting the housing needs of those they support is difficult.
“This new fund sets a benchmark for how capital is made available to provide stable and long-term homes for people who do not have them.
“The investment structure offers clear benefits to both borrowers and investors, which is why it has already engaged the support of so many grant-making trusts and foundations.”
SASC launched its first fund in 2014.
Mr Rick said: “We are proud to have created an innovative investment structure in housing that appeals to both borrower charities and investors.
“The fund will address a major social issue by increasing the stock of quality homes that will be available to communities for the long term.”
