First Home Secured for London Homelessness Property Fund
The Real Lettings Property Fund2 (RLPF2), which launched only a month ago with initial investment of £45m from three London local authorities, has made its first purchase. The 2 bedroom property is currently in refurbishment and will be handed over to a London family living in temporary accommodation within a few weeks.
The Fund is a partnership between social impact investment company Resonance and homelessness charity St Mungo’s. As with its successful predecessor, the first Real Lettings Property Fund, this third Fund is buying homes to let to St Mungo’s to house homeless individuals and families across London.
The first Real Lettings Property Fund, launched in 2013, was the largest impact investment fund in the UK, achieving a final close of just under £57m in April 2015. That trailblazing fund is now delivering both financial returns to investors and focused social impact in homelessness, which RLPF2 aims to repeat at even greater scale. This Fund was also the first of its kind to see a Local Authority using a social investment solution to help resolve its housing issues.
The first close of the new Fund, received £45m investment from three London local authorities – Croydon, Lambeth and Westminster – to help create better pathways for homeless individuals, and their children, who would otherwise struggle to access private rented accommodation.
Croydon Council was an investor in the original Real Lettings Property Fund, and has returned as an investor in the third fund, whilst Lambeth and Westminster are new investors. They join a growing number of local authorities across the UK, which are using social investment as one of the tools to help address the need for housing for people who become homeless. Last year Resonance and St Mungo’s launched their second property fund, the National Homelessness Property Fund (NHPF), which focuses this approach on other cities around the country. Now in its second year and still open for investment, the NHPF has already purchased 103 properties in Oxford, Bristol and Milton Keynes where the local authorities were all founder investors. A number of further dialogues are nearing completion with other local authorities around the country to replicate this winning formula.
John Williams, Senior Investment Manager at Resonance, said: “Resonance is always looking for new ways to connect real investment with good social enterprise. When things work well, we then look to replicate and scale those models to achieve greater impact, and bring social impact investment opportunities to a more diverse range of investors. That’s been the case with the first Real Lettings Property Fund which has now been replicated to create a further two property funds that provide Local Authorities with a social investment solution.
“These funds are sensible financial investments at a scale which institutional investors can engage with and the impact model is measurable and working. This third fund will help thousands of formerly homeless tenants on a path to secure independent living in the future.”
Susan Fallis is Director of Real Lettings, which is the social lettings agency set up by St Mungo’s to manage the properties. She said: “We are delighted to be working with Resonance on this second London Fund since the first has been a great success in helping us grow this social enterprise model.
“The keys to that success are Resonance’s proven ability to source properties that are suitable for our tenants, at a price that makes sense from an investment perspective, and the close operational partnership which we have been able to build with our tenants to provide them with housing for up to three years so they can build up tenancy histories that enable them to move on into more long term accommodation.”