Surging residential property prices and the exceptional pressures on local authority housing stock and adult care budgets are just a few of the reasons why social housing is never far from the headlines. But with a market that could now easily be judged as dysfunctional, there is surely a huge role that can be played by impact investors – those looking to effect social change as well as being able to see their money provide a meaningful return.
On Wednesday 27th January, the Impact Investor Club convened in London once again, this time to hear what is driving investment in the social housing revolution. It goes without saying that this movement is in its earliest stages – otherwise the headlines about homelessness simply wouldn’t exist – but from the view of the panellists, change does very much seem to be afoot.
The panel was chaired by Colin Peacock, head of the Social Stock Exchange’s property advisory board, whilst the keynote address was delivered by Andrew Dawber, Chairman, Funding Affordable Homes. This was followed by business overviews and some engaging commentary on the sector from three Social Stock Exchange member firms – Alastair Graham, Director, Golden Lane Housing, Paul de Savary, CEO, Home from Home Care, and Anthony Walters, CEO, Ashley House
Investment in real estate has become such a hot topic in recent years that the mere weight of capital being tipped into the sector – at least what might be considered the sector’s mainstream elements – by institutions has actually served to depress the yields that are on offer. So the question now is how can these same institutions, who want to be exposed to property for the security that bricks and mortar propositions offer, rather than on the fanciful hope that capital gains will continue ad infinitum now manage to deploy this capital efficiently?
The challenge seems to be a rather blunt one – many of the investors in control of vast swathes of capital that could be quickly swept in to support projects like this simply don’t understand. Concepts like social housing or living on extremely tight budgets simply aren’t in the lexicon of those sitting atop healthy cash piles, whilst adult social care is considered by many to be very much the preserve of the state. It’s absolutely worth stressing that this shouldn’t be seen as the territory of the speculative property punt where an astutely bought piece of land can be tucked away for a few years before being sold on for a 100% gain, but it’s more the realm of permanent capital, that is in turn backed by a fundamental asset that’s needed by everyone.
As one of the panellists put it, this is benevolent capital. Impact investing isn’t about foregoing yield, but it does encompass the idea that you can make a ‘safe-as-houses’ financial return at the same time as doing something that benefits society in a tangible manner. Yes we remain constrained by issues such as the availability of land to build on, and the people who can undertake these tasks. The country faces an acute skills shortage when it comes to the construction trade, but the evidence suggests that there is no shortage of capital waiting in the wings to help realise these opportunities – many of the holders of these funds that are waiting to be unlocked just don’t seem to realise it – yet.
For more information please contact: