The team at Resonance were excited and proud to win the “Highly Commended” award in the Sustainable Finance Category at this year’s prestigious national event at the end of last week. The award recognised Resonance’s impact residential property fund “The Real Lettings Property Fund” that provides move-on accommodation for homeless individuals and families in London.

Daniel Brewer, Managing Director of Resonance was presented with the Award by Fiona Woolf, the Lord Mayor of London, who has put emphasis on the City as an international centre for social investment. This award came shortly after the fund accepting investment from London Borough of Croydon and the first cohort of individual investors taking it to what we believe is the largest impact investment fund in the UK at £26m.

The Real Lettings Property Fund (RLPF) is a landmark investment fund developed by Resonance Limited and homelessness charity St Mungo’s Broadway in response to a growing failure in the rental housing market resulting in rising numbers of people at risk of being homeless in London. The Fund was launched in February 2013 as a UK limited partnership with a proposed life of 7 years. It is seeking to raise up to £100m of ungeared equity investment. The fund acquires one and two bedroom flats across London which are leased to St Mungo’s Broadway who make them available to homeless families and individuals referred to them by the London Boroughs and other agencies.

Sustain-City-Awards
The Awards are aimed at businesses that can prove that their projects are sustainable and that hopefully, they can be an inspiration to other cities around the country.

Daniel explained, “The Real Lettings Property Fund is a highly scaleable and replicable model providing a risk adjusted return whilst not compromising on its impact focus. We have already begun conversations with other cities up and down the country exploring how we can take this model national, but for now our clear focus is on continuing to acquire 5-10 properties a week that can both generate our target yields and provide quality accommodation that provides homeless families with a safe and secure base from which they can move forward again in their lives.”

Daniel described how the Real Lettings Property Fund fits the criteria for sustainability: “Much of the awards focused on ‘green’ interventions, however there was clear criteria around the demographic sustainability of cities. With private rents rising in London at circa 9% pa and benefits being capped in multiple ways, there is currently a growing cohort of families and individuals stuck in temporary bed and breakfast or other hostel accommodation costing London Boroughs millions of pounds each year – a burden paid for in the end by Council Tax payers. These people are part of our city and they are currently no prescription entirely unable to access both private and social housing provision. A city can only be truly sustainable if it doesn’t exclude vast swathes of people who call it their home. It is a great honour to have the Sustainable City Awards recognise this.”

The Real Lettings Property Fund provides an important transition from the pressure of being homeless, often in large local authority paid-for bed and breakfast hostels and mainstream private or social housing, where there is no support. Indeed there are many Local Authorities who feel economically compelled to acquire stock in far removed areas of the country in order to deal with their housing deficits and their statutory obligations. Buying out of area stock, whilst appropriate for a few, typically uproots families from areas where they have social networks and connections which are a key factor in ensuring they don’t become homeless again.

The fund provides a much-needed tool for Local Authorities to avoid the panic of forcing vulnerable people into the first available house (often of poor quality or in an inappropriate area) by engaging St Mungo’s Broadway in an assessment of need and transitional support into one of the Fund’s properties. The support model has proven results in terms of opening up more housing options, achieving progress towards work, and greater resilience against reverting to homelessness. All three objectives are measured and reported on to investors. The Fund is then able to demonstrate to private landlords that these tenants are in fact capable of sustaining a private tenancy through the 1-5 year track record they build up housed in fund properties. All too often private Landlords cast a blanket rule of having no benefit tenants in their properties, but St Mungo’s Broadway are able to show that with good landlording and a quality property, these tenants can be more stable tenants than the very transitory open market alternatives.

Of course the Award was also given to companies that can inspire and encourage others. Daniel Brewer, Managing Director of Resonance, said “Croydon have shown real leadership by using their balance sheet, rather than just relying on increasingly tight revenue budgets, to provide for some of their more vulnerable families. We’re hoping a number of other London Boroughs will follow suit.

“We have also been approached by several other local authorities across the country and by other housing providers to explore ways we can replicate this success to avoid Local Authorities spending large amounts of money on B&B accommodation. We are confident that winning an award for sustainability will demonstrate to a wide group of investors, local authorities and landlords that there is a sustainable intervention that is inclusive of some of those most marginalised in society and which works both socially and economically.”