Social investment is a key tool to solving the housing crisis

At Better Society Capital, we work alongside our partners to leverage private capital, including our own, to tackle some of the biggest social issues in the UK, issues just like this one.

One of our long-standing partners and investees, Resonance, has launched and managed five funds focused on reducing homelessness. Their approach is simple but effective: buy homes, refurbish them and lease them to trusted housing provider partners that, in turn, lease them to people at risk of homelessness or in temporary accommodation.

“3,300 people have been housed, avoiding poor-quality temporary accommodation, and the investment has delivered £140m in direct savings for the government”

In 2024, we commissioned consultancy Alma Economics to evaluate the impact of these funds. The findings were clear: since the first Resonance fund launched, 3,300 people have been housed, avoiding poor-quality temporary accommodation, and the investment has delivered £140m in direct savings for the government.

Alma’s research also projects a further £119m in savings by 2035, proving that these models don’t just provide housing – they deliver long-term stability and financial savings.

Another powerful example is the Social Investment Pilot we delivered in partnership with the Ministry of Housing, Communities and Local Government (MHCLG). A grant of £25m, matched by Better Society Capital, catalysed another £215m in additional capital to prevent homelessness.

This included investment from local government pension schemes, foundations, local authorities and high-net-worth individuals. This money was then invested with three fund managers: Resonance, Social and Sustainable Capital (SASC) and Bridges Fund Management.

The independent evaluation of the pilot’s first two years, published this April, found that 82% of homes provided were in the top 40% of areas across the UK with the highest rates of homelessness. Over a third (36%) were delivered in the 10% of areas with the most households in temporary accommodation, and 100% of tenants housed through Resonance, and 70% through SASC, came directly from emergency or temporary accommodation.

The evaluation also noted that, in some cases, the quality and location of these homes were better than the temporary accommodation residents were in previously.

“These studies prove what many of us working to solve the affordable housing crisis already know: social investment works. But it needs the right conditions to scale”

These studies prove what many of us working to solve the affordable housing crisis already know: social investment works. But it needs the right conditions to scale.

There are two steps the government can take. First, unfreeze Local Housing Allowance. Not only does the freeze push people into the poorest-quality housing away from their support networks and families and into emergency accommodation, it also creates uncertainty for investors and limits the amount that could be available to help solve the temporary accommodation crisis.

Second, scale up MHCLG’s Social Investment Pilot. The government’s initial £25m contribution has already mobilised hundreds of millions in additional funding and saved millions more in public spending. Increasing this grant will deliver long-term savings and, far more importantly, better outcomes for people experiencing poor housing or homelessness.

There is no silver bullet for the UK’s housing crisis. But for councils and policymakers looking for solutions that combine financial tools with real impact, social investment must be part of the plan.

If we want to stem the rising tide of homelessness, we need all players at the table to combine forces to build not just homes, but better futures.

Gemma Bourne, managing director, Better Society Capital