Resonance Homelessness Property Fund Receives £15m Investment from the GLA
Social impact investment company Resonance has received £15m investment from City Hall, London to purchase affordable housing for the homeless in the capital, helping them move on from temporary emergency accommodation and live independently.
Resonance’s three property funds – The Real Lettings Property Funds (RLPF) 1 & 2 in London, and the National Homelessness Fund – have now grown to more than £155m and provided 600+ homes nationwide, housing over 1,500 people who are homeless or vulnerable to homelessness.
The GLA’s investment is going into the Real Lettings Property Fund 2, launched in January 2017 when LB Croydon, LB Lambeth and LB Westminster committed a total of £45m. The target size for this Fund is at least £100m, potentially providing around 330 affordable one or two bedroom flats in the Greater London area. Individuals or households, nominated by City Hall, can receive light touch support from Real Lettings, a social lettings agency run by homelessness charity St Mungo’s, to maintain their tenancies and move towards employment, stability and independence.
James Murray, Deputy Mayor for Housing and Residential Development, said: “One person being homeless in London is one too many, and this project offers us an important chance to provide an affordable, stable home for those who need it, as well as easing the demand on local authorities. We know many homeless people are ready to move on from emergency accommodation and want to live independently – this is the first step to supporting them into employment and making sure they are never left without a home again.”
The Property Funds follow a traditional pattern with income generated from rents and capital from appreciation when the properties are sold (most likely to a follow-on social impact investment fund). Resonance buys properties as individual units rather than in blocks thus diversifying the portfolio, while investors’ risk is further reduced with Real Lettings acting as guarantors of rents. But the innovative focus of these funds is on their social impact. So often prospective tenants who have been homeless can feel barred from the private rented sector, whereas in this innovative model St Mungo’s and Real Lettings’ expertise allows them to judge tenants’ readiness to progress towards independence and gives them that chance of establishing a tenancy.
The RLPF 1 Social Impact Report 2016/17 reveals substantial positive outcomes: 100% tenancies maintained for at least 6 months, with 61% of tenants confident to look for a property in the private rented sector. Single mother, Vanessa, who had been staying first with her mother, then with friends
in overcrowded accommodation, says that her RLPF flat has “Definitely opened up doors and given me and my daughter a better future.”
Susan Fallis, Director of Real Lettings, says “Since the Funds launched we’ve been able to house hundreds of people who otherwise would have been in temporary accommodation or hostels. Resonance has a proven ability to source properties that are suitable for our tenants so that, with a little support, they can build up tenancy histories that enable them to move on further into longer-term accommodation, and on with their lives.”
Karen Shackleton, Resonance’s new Chair, says “We are delighted that GLA have joined other pioneering authorities, Croydon, Lambeth & Westminster in investing into the RLPF2. In partnership with Real Lettings, a social lettings agency of St Mungo’s, our ambitious Homelessness Property Funds have already bought over 600 homes nationwide, housing more than 1500 people who were homeless or vulnerable to homelessness. We are thrilled that GLA has caught the vision.”
Karen welcomes the increased interest and participation in the Property Funds. “Resonance is now in conversation with more Local Authorities and Local Government Pension Schemes, both in London and around the UK with the strong indication that any investments from them are likely to be amplified by those of large Investment Funds and individual investors.”