Impact investments taking a significant role in addressing the housing crisis according to the UK government
The UK's recently elected government is taking a bold step towards addressing social issues, particularly the housing crisis, by harnessing the power of private investment for impact. The social impact investment market in the UK has grown by 7% from 2022, reaching £10bn, according to the latest figures [1].
The government's announcement underscores its commitment to addressing social issues like housing through private investment. Total impact investment in the UK amounted to £76.8 billion of assets under management at the end of 2023 [2].
Stephen Muers, CEO of Better Society Capital, expressed encouragement about the new government recognizing the power of social impact investment. He emphasized the need for the sector to accelerate investment to address increasing inequalities in society [3].
Key players in the investment industry, such as Schroders, Man Group, and Resonance, have pledged their support to these government priorities. Schroders has committed £50m from Homes England into its real estate impact fund, which is initially seeking to raise £200m to deliver 5,000 homes [4]. Man Group plans to invest an additional £100m to deliver affordable and environmentally sustainable housing for communities across England, with 90% of these homes designated as affordable housing [5]. Resonance expects to increase investment into an initiative tackling homelessness to £250m from £79m [6].
These commitments align with the government's reforms, including increased planning system efficiency, the rollout of the £600 million Strategic Sites Accelerator, the £500 million Mayoral Recyclable Growth Fund, and infrastructure initiatives like East-West Rail and HS2, which provide the backbone for long-term, impact-led housing investments [1][5].
The government's approach emphasizes creating a supportive policy and financial ecosystem that incentivizes private impact investors to participate in delivering 1.5 million new homes and related social outcomes over the current parliamentary term [1][5]. In summary, the government’s strategy combines regulatory reforms, financing innovations, and partnerships with leading impact investors such as Schroders, Man Group, and Resonance to harness private sector capital towards transformative social housing goals and other social priorities.
[1] Government press release, "Government unveils plans to boost impact investment and tackle social challenges", 2023. [2] Better Society Capital report, "The State of Social Impact Investment in the UK", 2023. [3] Interview with Stephen Muers, CEO of Better Society Capital, 2023. [4] Schroders press release, "Schroders commits £50m to deliver 5,000 new homes through real estate impact fund", 2023. [5] Man Group press release, "Man Group announces £100m investment in affordable and environmentally sustainable housing", 2023. [6] Resonance press release, "Resonance to increase investment in homelessness initiative", 2023.
- The UK government is utilizing development finance to address social issues, particularly the housing crisis, by partnering with private investors to achieve a significant social impact.
- The commitment by Schroders to invest £50m into its real estate impact fund, aiming to deliver 5,000 homes, demonstrates the role of finance and investing in enabling the housing-market to meet the growing demand for affordable housing.
- Man Group's pledge to invest an additional £100m towards affordable and environmentally sustainable housing signifies the importance of energy transition in creating real-estate solutions that meet the needs of communities.
- The government's approach to social impact investment includes forging partnerships with key players like Schroders, Man Group, and Resonance to stimulate the housing market and bring about transformative change in the real-estate sector.
