New pension fund-backed homelessness property fund from Resonance targets £100m raise

UK impact investment firm Resonance has launched a new homelessness property fund, scaling up ambitions almost four-fold compared to the fund’s predecessor, and marking a first in attracting a pension fund among its investors.

The £20m National Homelessness Property Fund 2 aims to grow to £100m over its lifetime and to provide around 870 affordable homes. Resonance’s first National Homelessness Property Fund, launched in December 2015, bought 229 properties and housed nearly 600 people.

The new fund will initially focus on Greater Manchester – where 97,000 households were waiting for a social home as of last year – and will later expand nationally.

An estimated 280,000 people are homeless in the UK, according to the charity Shelter – one in every 200 people. More than 1 million households are on social housing waiting lists, and a looming recession, job losses and the end of the furlough schemes have together led to 227,000 private renters falling into arrears since the start of the Covid-19 pandemic, putting them at risk of losing their home.

It’s important that we are able to make a sound and socially impactful investment whilst generating a return for the pension fund, to enable it to meet the pension promises of our members

The new fund will acquire properties and lease them to the housing sector and homelessness charities which, in turn, will rent to individuals and families at risk of homelessness, with a secure tenancy. Housing and charity partners will also provide people with (or signpost them to) support to maintain a tenancy, find a job or education and save for a deposit, so that they can eventually move into the private rented sector.

The fund’s first partner is Let Us, a group of registered housing providers who offer ethical lettings agency services to landlords in Greater Manchester.

Meeting pension promises

Initial investors in the fund are the Greater Manchester Pension Fund – the first pension fund to back a Resonance property fund – which has committed £10m; plus Greater Manchester Combined Authority (made up of ten Greater Manchester councils and the Mayor) and social investment wholesaler Big Society Capital, both of which have committed £5m.

Resonance hopes to attract more institutional, pension fund, foundation and professional investors seeking a financial return from rent and capital appreciation alongside positive social impact.

Councillor Brenda Warrington, chair of the Greater Manchester Pension Fund – one of the largest public sector pension schemes in the UK, looking after over 375,000 pensions – said: “It’s important to me that we are able to make a sound and socially impactful investment which will help provide much needed, affordable and refurbished accommodation for rent across Greater Manchester, whilst still generating a return for the pension fund, to enable it to meet the pension promises of our members, who mainly live and work in Greater Manchester.”

City Mayor of Salford Paul Dennett, who leads on housing and homelessness at Greater Manchester Combined Authority, said the pandemic had exacerbated the “already alarming crisis of housing and homelessness” in the UK, adding, “We face a dangerous winter that threatens to push many more people into hardship, and we should be doing all that we can to prevent further housing insecurity.”

He continued: “The National Homelessness Property Fund 2 is therefore a timely initiative, and our investment will help us to address the fast-rising demand for social housing and give people in our city-region the security, stability and support they need.”

• Los Angeles-based Turner Impact Capital, a real estate investment firm dedicated to social impact, has closed a second affordable workforce housing fund with over $350m of committed capital – expected to unlock $1.25bn in investment potential. Turner Multifamily Impact Fund II will enable the firm to acquire and manage up to 10,000 additional housing units and keep them at rent levels that are affordable to residents earning less than the area median income. The first fund invested nearly $700m to acquire 7,840 workforce housing units occupied by more than 14,000 residents.  

Header image: Salford Quays (credit: Patricia van den Berg on Pixabay)

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