More than half of £10bn in social impact investing being driven into housing by pension funds

Chris Moore, investment and accounting team lead at Wiltshire Pension Fund, said: “Affordable housing provides us with inflation-linked income with the potential for long-term capital appreciation – a perfect match for a long-term open pension scheme such as Wiltshire Pension Fund.

“We believe that the positive impacts delivered by investing in affordable housing are completely integral to the investment case. Affordable housing provides very positive benefits to those on lower or median incomes, priced out of homeownership in the less secure private rental sector.”

BSC’s investor research shows a desire for tackling social issues such homelessness and underscores the importance of high-quality housing for raising living standards and harnessing wider economic benefit.

After pension funds, endowments and charities are the second-largest investor group, followed by asset and wealth managers. The data is an estimate based on more than 1,000 investors.

The research comes as the government’s review of the pensions landscape, scheduled for this autumn, will examine barriers to pension fund investments within the UK. 

Just last month, Legal & General agreed a £350m partnership with UK pension scheme Nest and PGGM, a Dutch pension fund service provider, to build and manage UK rental properties.

Stephen Muers, chief executive of BSC, said: “It is a source of encouragement that the UK social impact investment market grew once again last year. However, we must not lose sight of the significant challenges ahead, whether that’s in housing, social inequality and the disparity in health and well-being across the UK.

“As we look to the future, it is crucial for investors, businesses and the government to work closely together to channel investment towards organisations that need it.”

“With the Labour government’s focus on growth we have a unique opportunity to shape policies that encourage more capital into impactful projects that benefit society, ease the burden on the treasury and support the economy.”

Earlier this year, BSC was one of more than 30 other banks and funders that outlined a number of proposals to unlock billions of pounds of investment in social housing.

Stephanie Peacock, minister for sport, media, civil society and youth, said: “Labour has a proud history in this area – with Gordon Brown setting up the idea of impact investment from social bonds.

“As we set our priorities as a mission-driven government, we look forward to continuing this legacy by championing the growing impact investment sector, who harness the innovation and entrepreneurship in our country and direct it towards a common good.

“From assets of community value to co-operatives – we want to see more projects being funded where they are needed most.”