Leading social impact investment company, Resonance, has launched a new social impact homelessness property fund, National Homelessness Property fund 2 (NHPF2), with an initial investment of £20m and target fund size of £50-£100m to help meet increasing demand from those who are homeless or at risk of homelessness.
The first partner for the fund is with Let Us, which is made up of a group of registered housing providers who offer Ethical Lettings Agency services to landlords in Greater Manchester (Bolton at Home, ForHousing, Salix Homes, Stockport Homes Group and Wigan Council), set up by Greater Manchester Housing Providers (GMHP), Greater Manchester Pension Fund, Greater Manchester Combined Authority and Big Society Capital, the UK’s leading social impact investor, are the first investors into the fund.
The fund will initially focus on purchasing affordable homes in the Greater Manchester region* and will expand nationally:
- 97,000 households in Greater Manchester were waiting for a social home in 2019
- Over 26,000 of these households were identified as in priority need for a social rented home
- Over 2,000 households in Greater Manchester in temporary accommodation are waiting for a permanent home
An estimated 280,000 people are homeless in the UK, according to Shelter, equating to one in every 200 people. Over one million households are on social housing waiting lists and 4.3 million do not meet the minimum requirements defined by the Government’s Decent Homes Standard. Demand for social housing is huge, but the impact of COVID-19 has made it even greater; the combined impact of the looming recession, job losses and the ending of the furlough schemes has led to 227,000 private renters falling into arrears since the start of the pandemic, putting them at risk of losing their home (Shelter).
NHPF2 has been created following the successful model of the National Homelessness Property Fund — which was launched in December 2015 purchasing 229 properties and housing nearly 600 people who were at risk of or experiencing homelessness — and in response to the growing need for affordable housing.
How it works
The new fund works by acquiring properties and leasing them to the housing sector and homelessness charities which, in turn, will rent to individuals and families at risk of homelessness, with a secure tenancy.
The fund’s first partnership with Let Us, the Greater Manchester Ethical Lettings Agency, will see more high-quality homes in the private rented sector made available to tenants who really need them, helping to reduce homelessness in the Greater Manchester region. Let Us already manage properties on behalf of many private landlords and with competitive rates and flexible rates — the partners are looking to help more local landlords.
By partnering with housing and charity partners, the fund will enable individuals and families to not only be provided with housing but also to have access to — or signposted to — support to help them maintain their tenancies, find employment or education, set down roots in the community and to save for a deposit, so that they can eventually move into the private rented sector with a track record of maintaining a tenancy.
The aim is to attract institutional, pension fund, foundations and professional investors, who will be attracted by Resonance’s track record, the financial return from rent and capital appreciation and also the strong focus on achieving substantial positive social impact, by helping to reduce homelessness.
The fund aims to grow to £100m, over its lifetime and provide around 870 affordable homes across the UK.
Simon Chisholm, Resonance’s Chief Investment Officer said: “With homelessness on the rise the need for safe, decent and affordable housing is great; in Greater Manchester alone over 80,000 people are on social housing waiting lists. Building on the success of our previous property funds Resonance is proud to launch our next social impact property fund, the National Homelessness Property fund 2 which will initially focus on purchasing affordable homes across the North West. We are delighted that our first partnership is with Greater Manchester’s ethical lettings agent Let Us and that our initial investors into the fund Big Society Capital, Greater Manchester Combined Authority and — a first for a Resonance property fund, a pension fund investor, Greater Manchester Pension Fund — will enable the fund to make a real difference to people’s lives.”
Working in partnership
Lee Sugden Chief Executive of Salix Homes and Chair of Let Us commented: “We’re proud to be working in partnership with this significant fund which will help secure properties for people who really need a place to call home. Not only will this investment provide safe, high quality homes which provide the foundation for a happy and successful life, it is also a real seal of approval for an initiative like Let Us, creating ethical private lettings on this scale.
“It is just another example of how Greater Manchester is coming together in its mission to tackle homelessness and I’m sure this fund will provide another big step forward.”
Karen Ng, Investment Director at Big Society Capital, added: “We are proud to continue our support for Resonance’s range of homelessness property funds established since 2012, further scaling a proven model which has raised over £200m to date and provided over 800 homes across the UK. We’re delighted that this fund will enable a wider range of investors and charity partners to join efforts in tackling homelessness — and we look forward to seeing the continued expansion of this work in response to such a critical and urgent issue.”
City Mayor of Salford Paul Dennett, GMCA Lead for Housing, Homelessness and Infrastructure, said: “The coronavirus pandemic has exacerbated an already alarming crisis of housing and homelessness in this country, and its impact will be felt for many months to come. We face a dangerous winter that threatens to push many more people into hardship, and we should be doing all that we can to prevent further housing insecurity.
“The National Homelessness Property fund 2 is therefore a timely initiative, and our investment will help us to address the fast-rising demand for social housing and give people in our city-region the security, stability and support they need. We want high quality, truly affordable homes to be available to everyone across Greater Manchester, and the follow-on fund announced today by Resonance is a positive contribution to that goal and towards tackling the housing and homelessness crisis within Greater Manchester.”
Cllr Brenda Warrington, Chair, Greater Manchester Pension Fund aded: “I am proud that the Greater Manchester Pension Fund is able to invest in the Resonance National Homelessness Property fund 2. It’s important to me that we are able to make a sound and socially impactful investment which will help provide much needed, affordable and refurbished accommodation for rent across Greater Manchester, whilst still generating a return for the pension fund, to enable it to meet the pension promises of our members, who mainly live and work in Greater Manchester.”
* All Greater Manchester stats from the Greater Manchester Housing Strategy 2019-2024.