Social housing plays a pivotal role in providing affordable housing for those most in need of it, benefiting local communities and countries as a whole. But investors considering an allocation to the asset class must pay close attention to the ESG implications, argues Mikhaila Crosby.

The UK is in a housing crisis; that much is widely acknowledged and understood.

The problem has been exacerbated by the COVID-19 pandemic and its impact on workforce availability, as well as the lack of construction materials. There are not nearly enough new homes being built to meet demand as populations grow.

However, simply increasing the supply of housing will not address the whole problem or benefit those members of society most in need. Crucially, the undersupply of social rent housing urgently needs to be addressed.

Social housing investments can deliver significant positive societal impacts, particularly for low- to middle-income households. When done well, investment in this sector can support governments’ affordable housing programmes and targets by delivering housing to disadvantaged or vulnerable groups, individuals and households. But investors considering an allocation to the asset class must pay close attention to the ESG implications.

Download ‘ESG considerations for social housing’ to understand:

  • Why the UK faces a social housing crisis
  • The ESG investment case for social housing
  • How to approach the financial, social and reputational risks

Key risks

Investment risk

The value of an investment and any income from it can go down as well as up and can fluctuate in response to changes in currency and exchange rates. Investors may not get back the original amount invested.

Illiquidity risk

Where funds are invested in real estate / infrastructure and illiquid private assets, you may not be able to switch or cash in your investment when you want because real estate in the fund may not always be readily saleable. If this is the case we may defer your request to switch or cash in your units.

Valuation risk

Investors should bear in mind that the valuation of real estate / infrastructure is generally a matter of valuers’ opinion rather than fact.

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