The impact investor hopes the government support will help attract further private investment that will help the fund to grow to some £50m.
Social impact investor Resonance said the UK government had committed £20m (€24m) to one of its funds supporting community-led local housing projects.
Resonance said the commitment by the Ministry of Housing, Communities and Local Government to the Resonance Community Developers (RCD) fund marks the first time the government has supported this approach to financing housebuilding at such a scale.
The fund supports community groups in accessing capital for housebuilding and overcoming other barriers to delivery. Besides investment, it also provides pre-development support, helping community organisations with feasibility studies, planning and funding.
The approach allows local people to take the lead in the design and location of new homes, with community groups able to access land and receive planning permission that other developers cannot, according to Resonance.
The government investment is intended to provide impetus to an evergreen social impact investment fund model that blends grants and private investment, which, Resonance said, will allow the fund to grow to around £50m eventually.
“We are actively seeking additional investors to help us scale this fund to its full £50m potential,” Jon Rolls, head of developing communities at Resonance, said.
Immediate deployment
Rolls said the first £6m are ready to deploy straightaway, and that Resonance has already started working with communities to access land and advance projects that will provide much-needed affordable, quality homes for families.
The fund is working with more than 30 community groups across England. Resonance cites the example of YorSpace, a community land trust based in York, which has benefited from a £2.5m investment from the fund, enabling the development of 14 affordable, low carbon homes in the city.
James Neward, co-founder of YorSpace, said his organisation is “on a mission” to create lower cost, low carbon communities that are designed by and for people that live in an area where many had been left behind.
Investments in initiatives such as the RCD fund are being made in the context of an ambitious strategy from the UK’s government to tackle a chronic housing shortage by building 1.5 million homes in England over the current parliament, which is scheduled to run until 2029.
As part of this effort, the government announced in late March that it will provide £2bn of new grant funding to deliver up to 18,000 new social and affordable homes. It described this as “a down payment from the Treasury ahead of more long-term investment in social and affordable housing planned later this year”.
The government said construction of “thousands of new affordable homes” will start by March 2027. It encouraged providers to come forward with projects and bids rapidly to speed up delivery of new housing supply.
Resonance is one of the most active impact investors in housing and other projects that promote community cohesion. The RCD fund invests in sports & leisure facilities, low carbon and renewable energy generation and assets such as community pubs, as well as affordable homes.
Earlier this year, Resonance CEO Chris Cullen told Impact Investor that its current fund to help house the homeless – the National Homelessness Property Fund 2 – was expected to close at around £175m in coming weeks. Resonance also said recently that two of its funds, whose investors include pension funds and local authorities, had invested £23m to date into housing homeless people in Bristol.
