UK-based social impact investor Big Society Capital (BSC) has backed an affordable housing fund managed by Octopus Investments.
Investment manager Octopus said BSC has made a £10m (€11.7m) commitment to Affordable Housing Fund (AHF), a fund that also received £50m from London CIV at its first close last month.
In December, Octopus said the first close of AHF will enable more than 500 affordable family and older persons’ homes to be built across the UK and is the first step towards the fund’s target to fund 5,000 homes in the coming years.
AHF has made its first deployment through a forward funding, committing to acquire 26 homes in Great Haddon, Peterborough, from Vistry Homes. The homes will be owned by NewArch Homes, the fund’s registered provider of social housing. All units are expected to be delivered by April 2025.
Octopus said AHF has been set up to accelerate the delivery of affordable homes, and will ensure that new homes are built with robust sustainability standards, adding that this aligns very closely with BSC’s goal to increase the supply of social and affordable housing in the UK, particularly for the most vulnerable.
Jack Burnham, head of affordable housing at Octopus, said: “While the affordable housing investment market is still relatively nascent, it is growing, and we continue to receive strong demand from investors.
“They are attracted by the potential to generate long-dated sustainable income, low correlation to other real estate sectors and the ability to have real tangible impact.”
Drew Ritchie, investment director at BSC, said: “We believe that impact-driven private capital has a vital role to play in addressing the country’s housing shortage and we seek to invest in best-in-class managers and investment models that we believe can unlock capital at scale.
“This is one of the reasons why we have invested into Octopus’ AHF, as well as its strong focus on supporting low-income families and older households to access a quality, secure and affordable home.”
Fraser Hopes, managing director of Vistry Homes, said: “The sale of 26 homes at Great Haddon Wood to Octopus will help people looking to rent a home, or to buy through shared ownership and become part of this thriving new community near Peterborough. We look forward to welcoming the first residents to their homes later this year.”
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