In Focus: Corporate Advisory – Funding Affordable Homes


By Andrew Dawber, Head of Corporate Advisory

Big Society Capital, the leading social investment firm, has invested £15 million into Funding Affordable Homes

Funding Affordable Homes (“FAH”), a social impact company which enables long-term socially responsible private investment into the affordable housing sector, announced in January 2016 that it has received an investment of £15 million from Big Society Capital (“BSC”).

The initial funding round, including the investment by BSC allows FAH to invest up to £100 million in affordable housing projects prior to a further funding round in 2016. It aims to invest £500 million during its first three years of operation and develop a large-scale freehold portfolio of homes.

FAH targets a return of 8+ per cent from interest income, rent and capital appreciation, with the intention of making regular dividend payments to shareholders. Its business model is to own the freehold interest in affordable homes and enter into long-term occupancy agreement with housing associations and local authorities, operating a risk-sharing, partnership model.

“In a volatile market, this is an investment that provides stability, with income that is secure and reliable, and delivers both a financial and social return. It’s a different model for the affordable housing sector, and one which we think will become much more common in the sector – it will allow housing associations and local authorities to deliver their own homes and in part, help alleviate the housing shortage in the UK,” says Andrew Dawber.

Salamanca Group led the creation of FAH and acts as Financial Adviser to the Company.

This article is part of our March 2016 Private Office Newsletter.

To read the PDF version online, click here, or to read another article online, please follow one of these links:
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