Research published today by Better Society Capital (BSC) and The Good Economy (TGE), sponsored by Savills, shows that equity investment in affordable housing is accelerating the delivery of affordable housing in the parts of England facing the greatest housing pressures.
The study, The Impact of Equity Investment in Affordable Housing, analyses 14,739 homes and £1.56 billion of gross assets across six investment fund managers. It provides the first aggregated picture of how equity-backed Registered Providers (RPs) are contributing to affordable housing delivery amid growing capacity constraints in the traditional social housing sector.
The report sets out how institutional investment is contributing to affordable housing by examining the types of homes being delivered, where they are located, how they are financed and the standards they meet and comparing it to National Affordable Housing Supply data. It shows that these models operate alongside traditional housing providers and can add value in areas facing rising demand and limited public funding.
It also underlines the importance of consistent, transparent impact reporting to ensure that investment continues to align with housing need and supports better outcomes for the most vulnerable in society.
Key findings from the study:
- Institutional investment is flowing most heavily into the regions where housing is least affordable. The South East accounts for the largest share of homes delivered (23%), followed by London (18%) and the East of England (16%). According to ONS data, these three regions face the greatest affordability pressures in the UK.
- Homes delivered through these investment models are more likely to meet minimum space standards. Across the sample, 63% of properties meet Nationally Described Space Standards, compared with around 43% across wider sector benchmarks. This suggests that institutional investment is helping bring forward larger homes than much of the recent affordable housing supply.
- There is stronger energy performance in homes within Investment Fund Manager (IFM) portfolios. More than 80% of the homes achieved an EPC B rating, with almost 10% reaching EPC A. By contrast, the majority of England’s private rented sector sits at EPC C or D.
- The report indicates that institutional investment is contributing additional supply in areas where traditional routes are constrained. Investment fund managers delivered a higher proportion of homes without relying on grant or Section 106 agreements (21% compared with 12% nationally).
Read the full report here.
Drew Ritchie, Investment Director at Better Society Capital commented: “Affordable living is out of reach for too many people and families. This report illustrates the role that institutional investment can play in delivering affordable homes. We believe that transparency around capital flows and impact delivered is essential to build trust, increase investment and drive better outcomes for society. We applaud the contributing fund managers for their commitment to this agenda and invite all stakeholders to use these insights as we all work to scale models that deliver high-quality affordable homes.”
Andy Smith, Head of Impact Services at The Good Economy: “We hope our analysis supports a more transparent, accountable and evidence-led conversation about the role of institutional capital in meeting long-term housing needs. Better impact data can help investors, Registered Providers and policymakers understand how well models are delivering quality, affordable homes in the places that need them most, shaping stronger strategies and partnerships over time.”
ENDS
Note to Editors:
- Findings in the report are benchmarked against the National Affordable Housing Supply dataset (2021–2024) and wider research on space and energy standards.
- The Investment Fund Managers (IFMs included) in this study do not represent the totality of the active fund managers – or investment partnerships – involved in affordable housing delivery.
About Better Society Capital
Better Society Capital is the UK’s leading social impact investor. Our mission is to grow the amount of money invested in tackling social issues and inequalities in the UK. We do this by investing our own capital and helping others invest for impact too.
Since 2012, we have helped build a market that has directed more than £10 billion into social purpose organisations tackling issues from homelessness and mental health to childhood obesity and fuel poverty, a twelve-fold increase in 12 years.
About The Good Economy
The Good Economy exists to accelerate the transition to an economy where finance delivers not only returns but better outcomes for society. The organisation works with investors and institutions to align real-world social goals and sustainable development priorities with how financial capital is deployed, managed and communicated.
Press Contact:
Lauren Rae, PR and Communications Manager
Email: lrae@bettersocietycapital.com
Telephone: 07464799565