THE Church Commissioners have invested £4 million in a community housing fund that’s geared toward constructing 1000 homes, of which 90 per cent can be “inexpensive”.
The money has been allocated by the Church of England’s Social Impact Investment Programme, which was arrange in 2020, inside the Archbishops’ Council, to “direct capital towards latest solutions to deep-rooted social challenges”, backed by a £25-million grant from the Commissioners. The programme’s annual report refers to “accepting higher risk or lower returns as a way to make investments that focus on specific areas of need aligned to the Church’s mission”.
For this investment, it has now partnered with London CIV, an investment-pooling company that exclusively manages local-government pension-scheme assets — totalling £32.9 billion — for the London Boroughs and the City of London. The two organisations have made a combined £104-million investment in a community housing fund run by the Man Group, an investment-management company.
The initial capital invested is predicted to enable greater than 350 “energy efficient, inexpensive family homes to be inbuilt areas of constrained affordability across the UK”. The ultimate aim is for the fund to boost £300 million, to deliver 1000 homes. “Constrained affordability” is defined as a ratio of greater than seven times median house price to median income, in an area authority area.
The housing will include a mixture of tenures. Seventy per cent can be homes for social rent (typically rented at lower than 60 per cent of the market rate) or inexpensive rent (typically 70 to 80 per cent of the market rent). The inexpensive housing can be leased to and managed by a not-for-profit housing association. Also available can be “intermediate or key-worker rent” homes (typically 85 to 90 per cent of market rate), and Shared Ownership properties.
The fund will aim for the rent level of every tenure to be lower than 35 per cent of the median income of that population cohort in the realm. When the affordability of Shared Ownership, the fund will consider the tenant’s mortgage payments, rents, and repair charge relative to their household income.
Announcing the brand new investment, Vanessa Morphet, head of social-impact investment on the Archbishops’ Council, said: “Too many families are vulnerable to the UK’s housing crisis and are priced out of decent, stable homes within the communities where they wish to live and work. Man Group’s Community Housing Team have set clear and impressive targets for the fund, including 90 per cent inexpensive housing assets and significant improvements within the energy efficiency of homes.”
The Office for National Statistics defines as “inexpensive” a property that could be bought with five or fewer years’ income. The median annual disposable household income was £35,000 in 2023, while the the median house price was £298,000: the reminiscent of 8.6 years of household income. In England, only the highest ten per cent of households by way of income could afford an average-priced home with lower than five years’ household income in 2023. In London, the typical home was not inexpensive for any household-income decile. House prices have increased twice as quickly as household incomes in England lately.
A latest vision for housing, Homes For All, endorsed by Archbishop Welby last 12 months, suggested that, by the tip of the present Parliament, no household on a mean income or below must be obliged to pay greater than 35 per cent of their disposable income on direct housing costs (News, 3 May 2024).
