COMMENT A housing shortage and pressure on the NHS continue to loom large as we get ever closer to a general election, so it’s right that these two issues should find themselves so high up the policy agenda.
Too many people with long-term care needs remain in institutional care settings, when they could be better supported in their own homes within their local community, closer to family and friends. Simultaneously, long-term under-investment into new homes is lengthening local authority social housing waiting lists. Up and down the country these two issues overlap, exacerbating local need for adapted homes for people who require long-term specialist care and support. The government estimates that supply of supported housing needs to roughly double, or increase by more than 125,000 homes, by 2030 if it is to keep pace with growing demand.
Relieving pressure
Fortunately, we don’t need to wait for political uncertainty to dissipate before private capital can support local authorities by delivering new specialised homes. Whatever form the next government takes, fiscal responsibility is likely to be a priority and that necessitates working with institutional funders to tackle the housing crisis.
In the specialised supported housing sector, the equity investment model has been evolving over the past decade to best ensure it is compatible with the needs of all stakeholders. By working in partnership with registered providers, care providers and local authorities to identify local need and then deliver new homes tailored to the specific support requirements of the intended residents, private capital can relieve pressure on registered provider development budgets, reduce care costs and deliver good homes.
As part of this evolution, all of our new leases provide more flexible terms that leave the day-to-day responsibility for operating our properties with our registered provider partners but insulate them from policy risk, at both a central and local level. We are looking to apply the same approach to risk sharing in our existing leases and have so far adapted more than 30% to reflect this increased flexibility, with the remainder set to be adapted over the next few months. Similarly, last year we voluntarily capped all our annual rent increases at 7% to keep them in line with the government’s wider social housing rent cap, irrespective of the fact that it did not apply to specialised supported housing.
Long-term value
We are also currently undertaking a pilot project through which we are funding energy efficiency upgrades in our properties to ensure they have an energy performance certificate of a C or above, regardless of the government’s decision to remove the 2030 target.
These are all long-term initiatives that reflect our learnings of the past 10 years and which help maintain and improve the homes we provide to residents, support our registered provider partners while also underpinning the long-term value of our properties. We like this sector because if we deliver good, long-term homes for our residents, then sustainable financial returns for our investors will follow.
Our latest forward-funding project is an example of how long-term private capital can benefit all sector stakeholders. In conjunction with Golden Lane Housing – a specialised supported housing registered provider – we will develop new, adapted, energy efficient flats for 12 adults with support needs in Chorley, Lancashire. The development has benefited from direct involvement from the local commissioners, and we will exceed a 10% biodiversity net gain on site. At a time when housing waiting lists continue to lengthen and fundraising remains challenging, this serves as a timely reminder of the value that private investment, working through a partnership model, can unlock in this sector.
Max Shenkman is a partner and head of housing at Triple Point Social Housing
