Big Society Capital, the UK's leading social impact investor, has published research showcasing the transformative impact of our Resonance Homelessness Property Funds. Over ten years our funds have housed over 3,300 people, including 1,607 children, who were in a housing crisis, resulting in significant savings for the government.
The independent findings are based on analysis of our five homelessness property funds, which have between 2013-2023 acquired over 1,000 properties – that, alongside support services provided by our housing partners, have saved local and central government £140m in spend on temporary accommodation, plus other homelessness costs on healthcare, mental health and criminal justice services.
The news comes as many local authorities face bankruptcy and grapple with mounting financial pressures, including skyrocketing temporary accommodation costs, which have increased 62% in five years.[1]
The research – which was conducted by Alma Economics - highlights the role that our funds have played in helping local authorities tackle this challenge. It demonstrates that thanks to the high-quality accommodation that enables access to wraparound care, tenants see a significant boost to their wellbeing when compared to those living in temporary accommodation – delivering wellbeing benefits equivalent to £17,500 per person.[2]
One tenant the funds have helped, in conjunction with our Housing Partner DHI is Lee, who became a chef at nineteen and for twenty years he worked in the sector. He worked his way through the ranks, eventually becoming a Head Chef for ten years. However, alcohol was a big part of the industry’s working culture, leading to dependency and Lee finding his life start to spiral out of control.
“This home, it’s helped me to relax, to calm down a lot. It’s helped me manage my abstinence a lot better. And in all fairness, to find accommodation like this, for someone who was in my position before, it’s extremely difficult, and that’s why I feel like the people who have made this happen for me are doing a fantastic job. It does make a difference.”
75% of households in temporary accommodation live in poor conditions and more than two-thirds of people have inadequate access to basic facilities; in contrast, 96% of tenants in Resonance homelessness fund accommodation report that the property is in good condition, with 97% reporting that it has had a positive impact on their relationships.[3]
The report emphasises the important role that government grants have played in driving the success of these initiatives in recent years. For example, the reallocation of existing housing investment made by the Department of Levelling Up, Housing and Communities (DLUHC) in 2021 and 2022 into the homelessness property funds leveraged significant additional funding from investors, multiplying the impact of government expenditure.
For every £1 of public and private investment into Resonance’s current fund, the National Homelessness Property Fund 2, £2.3 in financial and social value will be created over the next ten years.
Big Society Capital is calling for the government to reallocate a larger proportion of its existing spend to further scale initiatives like this which enable taxpayer funds to go much further. With a £100m grant from government, it estimates that the projected impact over the next ten years could be quadrupled - catalysing an additional £650m from investors, which could house 23,750 people and generate £1.1bn in public savings on homelessness.
Gemma Bourne, Managing Director at Big Society Capital, said: “The alarming reality is that vulnerable individuals and families are enduring substandard living conditions in temporary accommodation. This is not good for them and it puts a heavy financial toll on Local Authorities, pushing them dangerously towards bankruptcy. It also underscores a glaring shortage in social and affordable housing – with research showing that £16.9 billion will be needed every year to address undersupply.
“Our report demonstrates a solution which has now existed for over a decade - but for it to adequately address the challenge at hand, we need government to act now to actively crowd in further investment.”
Chris Cullen, Fund Manager and head of Resonance Homelessness Property funds, said: “Shockingly there are over 104,000 households living in temporary accommodation across England, including over 130,000 dependent children. This report from Big Society Capital and Alma Economics, highlights how social impact property funds can have an important role to play in not only successfully helping people in a housing crisis move on with their lives in safe affordable homes, but also the savings that can be achieved at both a local and central government level.”
Notes
Alma Economics was commissioned by Big Society Capital, the UK’s leading social impact investor, to assess and quantify the financial and non-financial impact of the Homelessness Property Funds managed by social property fund manager Resonance Ltd.
The main assumption underpinning the analysis is that these funds reduce homelessness by providing suitable and stable accommodation to households experiencing homelessness. This is supported by quantitative and qualitative evidence.
The data provided by Resonance on tenants' previous accommodation, as well as our engagement with Resonance and its partners, suggest that the funds provide accommodation for households on either a TA pathway or a rough sleeping pathway. The TA pathway encompasses households already in TA or on a waiting list for such accommodation. Typically, LAs refer households in the TA pathway to Resonance partners when they are unable to offer suitable and/or affordable accommodation. The rough sleeping pathway includes individuals either currently sleeping rough, or at risk of sleeping rough (with friends or family) or in emergency accommodation, such as hostels.
In other words, had the RPF not existed (the counterfactual), the households housed by the RPF would be either in TA or sleeping rough (or at risk of). This assumption is used to work out the impacts.
[1] https://england.shelter.org.uk/media/press_release/homeless_accommodation_bill_hits_17bn_
[2] The research demonstrates the benefits to life satisfaction of being housed in these funds. It uses findings from the Fujiwara and Vine’s (2015) analysis which puts a monetary figure on the impact of living in private accommodation vs temporary accommodation on life satisfaction. (https://hact.org.uk/wp-content/uploads/2021/11/Homelessness-and-wellbeing-analysis_web.pdf)
[3] https://trustforlondon.org.uk/research/shelter-still-living-in-limbo-why-the-use-of-temporary-accommodation-must-end/ ; https://resonance.ltd.uk/news/news/homelessness-property-funds-social-impact-report-2022-23
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