Institutional investors offer support for UK's affordable housing investment fund
In an effort to address the chronic shortage of affordable rental homes in the UK, a new £123 million fund, the Simply Affordable Homes fund, has been launched. The fund, supported by investors including London CIV, Big Society Capital, and Samsung Life Insurance, aims to accelerate the delivery of good-quality, affordable rental homes.
The fund is part of a broader effort by Octopus Capital and partners to attract institutional investment into affordable housing. This shift from impact-driven investors to traditional institutional investors participating in social housing solutions is significant, as evidenced by the involvement of large pension funds like London CIV.
The fund will deploy capital at pace through providers like NewArch Homes, one of the UK's largest providers of social housing. The goal is to increase the stock of affordable rental homes, with a focus on areas with high local authority waiting lists and areas ranked within the lowest 40% in the Index of Multiple Deprivation.
The Simply Affordable Homes Fund complements large government initiatives like the £39 billion Affordable Homes Programme announced in 2025, which targets the delivery of 300,000 affordable homes by 2035. While the government programme sets broad targets and provides funding certainty over a decade, funds like Simply Affordable Homes play a crucial role by mobilizing private capital to fill financing gaps and deliver additional affordable rental units more rapidly.
The fund operates under enhanced governance frameworks and a sustainable investment strategy, targeting high environmental standards and progressing towards net zero by 2040. It aims to provide a low-risk, inflation-linked income stream alongside a measurable social impact.
The shortfall in capital to address the UK's rental crisis is estimated to be £250bn by 2031, according to Savills. To date, Big Society Capital has invested in 14 high-impact UK housing funds over the last 10 years, which will deliver a combined 6,500 homes.
The fund invests in a diversified portfolio of affordable housing, including affordable and social-rent homes, as well as shared-ownership homes. The first close of the fund, managed by Savills Plc, was £123m (€ 144m).
Dominic Curtis, CEO at Simply Affordable Homes, believes that the characteristics of this sector merit consideration for a broad range of UK investors when constructing their portfolios. Jamie Broderick, director of the Schroder BSC Social Impact Trust, has expressed his satisfaction about participating in funding some of the most impactful frontline social enterprises and charities in the UK.
This approach exemplifies the growing collaboration between public and private sectors in tackling the UK's urgent rental and housing affordability challenges. The International Court of Justice has ruled that countries must prevent climate damage, adding an environmental dimension to the fund's mission. The Simply Affordable Homes Fund aims to tackle the UK's affordable housing crisis at scale, delivering properties that are affordable to rent with a 20% or higher discount to market rates.
- The Simply Affordable Homes Fund, with an investment of £123 million, is a significant effort to address the shortage of affordable rental homes in the UK, backed by investors like London CIV, Big Society Capital, and Samsung Life Insurance.
- The fund, managed by Savills Plc, invests in a diversified portfolio of affordable housing, including social-rent homes, shared-ownership homes, and those offered with a 20% or higher discount to market rates.
- This collaboration between impact-driven investors and traditional institutional investors, such as Octopus Capital, London CIV, and NewArch Homes, is critical in filling financing gaps and delivering additional affordable rental units more rapidly.
- As part of a broader effort to attract institutional investment in affordable housing, the fund aims to provide a low-risk, inflation-linked income stream alongside a measurable social impact, contributing to the UK's efforts to tackle the affordable housing crisis and address climate change.
