Most of the investment will be directed to the immediate purchase and refurbishment of properties in Gloucestershire, to help reduce the number of people being housed in unsuitable temporary accommodation in the UK region.
Gloucestershire Pension Fund (GPF) has invested £30m (€35.6m) in the National Homelessness Property Fund 2 (NHPF2), managed by UK social impact investor Resonance. The fund buys homes, which are then renovated for rent to the homeless and those living in temporary accommodation.
NHPF2 has now received £129m in funding from institutional investors since its launch in 2020. These include Greater Manchester Pension Fund, Liverpool City Region Combined Authority, Better Society Capital and Bristol City Council among others. The fund targets returns of 3% annual yield and 6% IRR.
GPF provides pension services for local government employees in the county of Gloucestershire in southwest England, and is part of the nationwide Local Government Pension Scheme (LGPS), which is administered locally by 86 local pension funds in England and Wales.
The Resonance fund currently owns more than 350 properties and supports almost 500 individuals or families across the UK, operating in the Greater Manchester, Merseyside, Bristol, Oxford and London regions. The latest £30m of funding from GPF could provide homes for some 750 individuals and families over the lifetime of the fund, according to Resonance.
£20m will be invested directly into the immediate purchase and refurbishment of some 90 properties in Gloucestershire to help reduce the number of people being housed in unsuitable temporary accommodation. The remaining £10m is being allocated to the purchase of properties for NHPF2 in London.
Chris Cullen, head of Homelessness Property Funds at Resonance, said the GPF investment showed the difference that local government pension funds could make through place-based investing.
“We are seeing increasing levels of interest from investors looking to make a difference in the communities where they and their members are based,” he told Impact Investor.
Under Resonance’s model, properties are leased to partner charities and housing associations with expertise in dealing with homelessness. These organisations, in turn, rent the properties out to those in need and provide tenants with “wrap-around” support.
In Gloucestershire, the leasing charity is Developing Health and Independence (DHI), which in addition to providing safe and stable housing, will provide tenants support with health and wellbeing, job hunting and training.
Rosie Phillips, DHI’s CEO, said housing was the single biggest cost pressure on struggling individuals and families, while lack of affordable housing caused stress, inequality and poor health.
“Without a secure place to live, progress in other aspects of life will be poor. A safe place to call home provides people with a platform on which to build their lives,” she said.
People being housed include those living in, for example, bed and breakfasts, hostels, hotels, private rented accommodation paid for by the local authority or who are sofa surfing.
Homelessness crisis
NHPF2 is one of five operational funds Resonance has established in response to a homelessness crisis exacerbated by a shortage of affordable housing in the UK. In its just-published Homelessness Property Funds Social Impact Report 2023/24, the organisation says that since the first of its funds was launched in 2013, it has helped provide homes for over 3,600 individuals and families in more than 1,100 properties, attracting investment from a total of 34 impact investors.
As Impact Investor reported in March 2024, researchers from Alma Economics have estimated Resonance’s property acquisitions up to 2023, along with the support services provided by their partners, saved local and central government £140m in spending on temporary accommodation and other costs relating to healthcare, mental health and criminal justice services.
However, the situation remains acute. UK government figures, highlighted by housing charity Crisis, showed a record 117,450 households were being forced to live in temporary accommodation in English council regions as of March 2024, 12% higher than the previous year. Meanwhile, spending by English councils on temporary accommodation in the year to March 2024 rose by 29% from the previous year to £2.29bn.
