The UK social and affordable housing sector sits at the centre of one of the country’s most acute and persistent social challenges.
Structural undersupply, rising housing costs, and demographic pressures have combined to create a housing crisis that is now visible across every major indicator of need.
In response to this, the past decade has seen new finance models enter the market with the aim of increasing the supply of social and affordable homes in the UK.
These models are part of a toolkit that can compliment the existing sector that has historically seen new homes predominantly being delivered by traditional Housing Associations, and to a lesser extent planning obligations on private development. The traditional means to finance new homes has been debt, but the sector now faces clear constraints on further debt-led expansion as borrowing headroom tightens[1].
In response, impact equity investment along with new partnerships have emerged that are meaningfully contributing to increasing the supply of good quality social and affordable homes.
From a standing start in the early 2010s, the UK market for social and affordable housing impact equity funds has grown to approximately £6 billion by the end of 2024, supported by increasing participation from institutional investors.
This report provides an introduction to this evolving market.
[1] Savills, A Balancing Act: How Housing Associations are balancing sector priorities (June 2023)
Contact:
Olly Tapper, Investment Partnerships (otapper@bettersocietycapital.com)
Lauren Rae, Senior Manager, External Communications (lrae@bettersocietycapital.com)
Download the full market map below