15th January 2024 | Author - Staff Writer
The benefits of social impact investing - why now’s the perfect time to invest in social housing

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Social housing investment for those seeking both reliable incomes and a commitment to the social impact of their investments continues to grow at a pace. Stef & Philips talk to DIY Investor about how making a positive social difference can impact the world.


The rise in social and affordable housing investment

The increase in investment in social and affordable housing has been evident at Stef & Philips, where we have witnessed a substantial rise in private investment over the last five years.

This surge can be attributed to three primary factors. Firstly, investing in social and affordable housing offers diversification, serving as a safeguard for investors against broader financial fluctuations. Secondly, the sector itself demonstrates resilient long-term demand. Lastly, the social housing sector benefits from statutory government funding, providing added resistance to broader economic changes. This upward trend is expected to continue. Recent research by JLL forecasts that by 2025, the affordable housing sector may comprise up to 23% of rental homes owned by institutions.

This is a noteworthy statistic, especially considering that approximately 8.5 million people in England are currently residing in homes deemed unaffordable, insecure, or unsuitable, as reported by the National Housing Federation. The housing crisis affects individuals of all ages across every region of the country.

The primary challenge revolves around funding. Addressing the shortage of affordable housing in the UK necessitates an estimated £250 billion. Despite the government's investments in infrastructure, there is an increasing reliance on private home builders and housing associations to aid in overcoming the housing crisis.

This is where public-private partnerships become valuable. Private investment can inject additional resources to complement public funds, leading to enhanced services that, in turn, attract further private investment.

All of which makes now the perfect time to invest. This isn't solely about potential profits; it's about delivering tangible outcomes for individuals and communities in need, with the assurance of consistent, long-term returns.

Towards a better society and economic system

Social impact investing in housing, once less attractive, has become a compelling option with numerous opportunities and advantages. Partnering with experienced entities like Stef & Philips for investment in rental housing within the social housing market presents benefits such as high demand, guaranteed year-round rentals with long leases, and hassle-free property management.

The increasing demand for quality, affordable rental units and the refurbishment of existing properties create a continuous stream of investment opportunities. Private investment in this sector supports its agility and innovation in providing accommodation solutions.

Beyond financial returns, investing in social and affordable housing contributes to the improvement of society. Analysis by the Building Research Establishment indicates that investing in poor-quality housing can generate over £135 billion in societal benefits, leading to enhanced well-being and reduced pressure on public services.

Stef & Philips, managing over 4,000 units, collaborates with private investors to address diverse community needs, including mothers and babies, care leavers, domestic abuse victims, rough sleepers, and LGBTQ+ residents and their families. Private investment in the social and affordable housing sector aligns with these societal contributions while offering sustainable returns.

And it's only going to get bigger...

Social impact investing in housing offers a distinctive chance for investors to engage in a dynamic market while actively contributing to addressing the UK's housing crisis and making a tangible impact on individuals' lives and broader society. By combining private investment with public funds, solutions for a sector in need of critical support can be found. Overall, social impact investing in housing has the potential to transform the existing economic system, instigate societal change, and lay the foundation for a more sustainable and inclusive future.
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