The UK is suffering from a huge shortfall of affordable homes for people on middle incomes, as well as a glaring lack of suitable accommodation for the less well-off and homeless, institutional investment firms told a conference today.

In a panel discussion at the IPE Real Assets & Infrastructure Global Investor Conference 2021 on social infrastructure, Shamez Alibhai, portfolio manager, head of community housing strategy, Man Group, presented solutions to the undersupply of affordable housing in the UK.

He said meeting the need for this type of housing among the UK population would cost approximately £16.9bn (€19.6bn) for the next 15 years.

“So that’s a £240bn problem that needs to be addressed to solve the housing market’s failure that is affecting median earners in England,” Alibhai said.

Simon Chisholm, CIO of UK social-impact investment specialist Resonance, talked on the topic of housing the vulnerable using social impact investments.

To illustrate the current scale of housing need in the UK, Chisholm said that last year 2,688 people were estimated to be sleeping rough every night and that 80,000 households were stuck in former temporary accommodation

“That is a £20bn residential property need to find appropriate accommodation,” he said.

However, that was only a fraction of the people who were on the social housing waiting list, which was now estimated to include more than a million, he said, and detailed Resonance’s investment projects for housing for women who were vulnerable because of domestic abuse, as well as for people with learning disabilities.

Post-COVID recovery must be sustainable

Asked by the panel’s moderator Georg Inderst, principal of Inderst Advisory, whether the coronavirus pandemic had affected her work, Fabienne Michaux, director of the SDG Impact initiative, said the task of achieving UN Sustainable Development Goals (SDGs) had become harder because of COVID-19.

“As is often the case, the most vulnerable and those affected the most have been disadvantaged by COVID,” she said.

“We’re seeing quite a lot of interest in terms of instruments to focus on social change and social issues, whereas before COVID I think it was overwhelmingly weighted towards environmental issues.

“So we are seeing more issuers looking to issue bonds backed by the commitment to SDG outcomes that are in the social sphere,” she said.

Michaux said there was an opportunity for many countries to consider how to rebuild economies in a sustainable way.

“But it does feel a bit like a sliding-doors moment,” she said. “Is the opportunity going to be taken to build that into the recovery, or is the impetus to drive the economic recovery so great that it’s, again, financial return on economy above all else? We’re still going to need to wait and see where that goes.”

Chisholm said the pandemic had led to “almost a revolution in homelessness” in the UK, ”with thousands of people who had been living on the streets being moved to hotel accommodation almost overnight.”

He added: “But that threw up a knock-on problem in what is the move-on opportunity for the people who are now in a hotel, so that they do not return to the streets? And I think it’s been very interesting to see how these homelessness property funds have been able to provide pathways out of that… So impact investing has been on the front foot even in the early days.”

Meanwhile, Alibhai said there had been public recognition of the essential role of nurses and other key workers during the pandemic, but these very people were being priced out the housing market – both in terms of homeownership and renting – in the areas they were serving.

“And I think also that recognition of the fact that the housing market has failed so fundamentally has really been exposed by COVID,” he said.

The pandemic had also shown the need for ESG transparency, said Sergio Dias, head key account management at ESG data firm RepRisk.

This had become clearer because of the additional risks to which companies had been exposed during the crisis, he said. “Whenever there is an impact, you need to make sure that impact is net.”

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