Industry Voice: Getting social housing right

Royal London Asset Management’s Senior Fund Manager Shalin Shah, and Investment Analyst Tom Johnson, explain that investing in social housing isn’t an easy win for sustainable funds.

clock • 2 min read
Industry Voice: Getting social housing right

In recent years, ‘social housing' has become an increasingly important component of our sustainable funds at RLAM. However, it is crucial to find the right way to invest in the sector, in a manner which respects the strong social benefits that it provides.

The provision of affordable homes is a clear social benefit, and one which makes the sector attractive for our funds. As housing charity Shelter England puts it, social housing "gives social renters better rights, more control over their homes, and the chance to put down roots".

The sector's approach to its own environmental, social and governance (ESG) obligations has also been maturing.  Royal London Asset Management (RLAM) fed into the consultation for the first set of industry-wide standards on sustainability reporting and we are encouraged by the numbers of housing associations that are taking them up.

Standardised data

The production of standard data should help investors to better compare the relative ESG performance of different  social housing borrowers. Increasingly, however, our analysis is driven by more than an assessment of operational policies and practices, preferring to make a more holistic assessment of what each association offers. For example, we aim to scrutinise the future development pipelines that our bonds are funding to assess how much is being put towards badly needed general purpose social housing, as opposed to homes for market rent or shared ownership. 

There are two major ways in which investors can get exposure to the social housing sector. The first, and our preferred method for our sustainable funds, is to buy bonds issued by registered not-for-profit housing associations. This is one of the most ‘impactful' elements of our portfolio as, while many businesses we invest in have a positive impact, here much of the lending we provide is going directly into the construction of new social housing properties.



This article was funded by RLAM

Past performance is not a guide to future performance.  The views expressed are those of the authors at the date of publication unless otherwise indicated, which are subject to change, and is not investment advice.

More on Investment

Darius McDermott: Five different ways to invest in Asia

Darius McDermott: Five different ways to invest in Asia

'A turning point'

Darius McDermott
clock 30 June 2022 • 4 min read
Only one IPO on AIM in Q2 2022

UK AIM IPOs fall to lowest levels since 2009

Worst quarter since financial crisis

clock 29 June 2022 • 3 min read
The regulator noted there was broad agreement across the industry regarding the potential harms caused by the growing role of ESG data and rating providers.

FCA sees 'clear rationale' for regulatory oversight of ESG data providers

Mixed feedback on UK green bond standard

James Baxter-Derrington
clock 29 June 2022 • 1 min read


The pursuit of (post-acquisition) independence

The pursuit of (post-acquisition) independence

Acquirers 'want investment revenue'

Jon Yarker
clock 07 April 2022 • 8 min read
What should adviser firms do when a SIPP provider goes bust?

What should adviser firms do when a SIPP provider goes bust?

A port in a storm

Hannah Godfrey
clock 09 March 2022 • 7 min read
Return of the Provider: A vertical integration story

Return of the Provider: A vertical integration story

Eight providers and their advice arms

Tom Ellis
clock 02 March 2022 • 7 min read