Research led by the Policy and Evaluation Research Unit (PERU) at Manchester Metropolitan University (MMU) has shown Better Society Capital’s (BSC) Social Investment Pilot (SIP) is effective in supporting sustainable housing solutions for people experiencing homelessness.
Established during the pandemic as part of the government’s ‘Everyone In’ initiative, SIP was found to deliver effective support to housing providers, who were able to lease or buy properties of a higher standard than the private rental sector in neighbourhoods with less deprivation.
Participating housing providers, including Nacro, Target Housing and Stockport Homes, increased their housing stock without borrowing more, enabling them to provide greater continuity of support services. The funding model supported them to act more flexibly and enhance rapport building with their clients, the study said, resulting in most residents feeling satisfied with their quality and location and leading to sustained tenancies.
Additionally, the majority of residents experienced improved wellbeing after becoming tenants in SIP-funded properties.
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While the study identified some challenges with affordability, such as residents struggling with high rent costs and a small percentage accumulating rent arrears, the program “has sparked conversations about housing-led service models among stakeholders, policymakers and potential private investors”, it said.
To date, the pilot has delivered 847 units of homelessness accommodation. Over 80% of properties are in the highest 40% of areas by incidence of homelessness, while 33% of properties are in the top 10% of areas of acute need.
Drew Ritchie, investment director at Better Society Capital, said: “We’re encouraged by the interim report’s findings, particularly the evidence that suggests the Social Investment model has distinct characteristics which can give people experiencing homelessness the best chance of success. This is valuable evidence for future investors and policymakers. By partnering with the government and working with these mission-driven fund managers and housing providers, we’ve demonstrated that this model can be used to attract more private investment into addressing housing challenges across the UK.”
Background
In 2021, the Ministry of Housing, Communities and Local Government (MHCLG) partnered with Better Society Capital (BSC) to bring in three fund managers – Bridges Fund Management, Social and Sustainable Capital, and Resonance – to invest £50m in buying and leasing properties across England, primarily in London and the North West. These properties were designed for people with recent experience of temporary accommodation and rough sleeping in areas with high homelessness rates and housing affordability challenges.
The £50m from MHCLG and BSC helped to crowd in another £215m of investment. This included £65m from Local Government Pension Schemes (LGPS), £53m from charitable trusts and foundations, and £74m directly from local authority budgets. This represented a 4.7x match from private capital on MHLGC’s initial £25m grant.
Various social investment models were tested, including leasing arrangements and property ownership options, to create new housing opportunities for people with recent experience of homelessness, while generating financial returns for investors.
Overall, the study found that the SIP remains effective in delivering longer-term, sustainable housing solutions for people who have experienced homelessness, while creating an evidence base to motivate future public and private investment in similar social housing initiatives.
Christopher Fox, research director at MMU, added: “The Social Investment Pilot is making a positive impact on homelessness support. By leveraging public-private partnerships, the pilot is securing sustainable housing for people who have been, or are at risk of, homelessness. While still operating at a relatively small scale, with hundreds of properties and promising outcomes, our evaluation shows how the SIP contributes to increased well-being, tenancy security and service efficiency. This pioneering initiative has the potential to inspire future investments demonstrating that social finance can change lives for the better.”
