What do investors need to consider when it comes to UK Affordable housing? We provide a background on the sector and discuss what benefits it can bring to institutional portfolios.
- There are few, if any, investments that can claim to have as great a social impact as Affordable housing. This sector benefits from all of the factors we highlighted in our prior reports Why Living (2022) and Why Living Now (2023), namely supply/demand imbalance, durable income streams and strong investor appetite.
- Yet the UK Affordable housing sector also benefits from specific factors and characteristics; affordability has become a critical issue, c. 1.3 million households are on waiting lists, fiscally-constrained balance sheets limiting the government’s ability to develop more Affordable homes.
- The sector is therefore in urgent need of private capital to assist with building a pipeline of new Affordable properties, and to help fund improvements to existing stock so that it meets increasingly stringent energy efficiency and fire-safety standard.
- Our UK Affordable Housing paper discusses how sector attributes such as tenure types, subsidies, grants and regulation are often beneficial to investors, and the different investment approaches available to investors.