British administration channels £20 million into Resonance community dwelling investment fund
UK Government Invests £20 million in Community-Led Housing Solutions
The UK government has announced a significant investment of £20 million into the Resonance Community Developers (RCD) fund, a social impact fund that supports community-led local housing projects. This investment aims to provide impetus to an evergreen social impact investment fund model that will grow to around £50 million eventually [1].
The RCD fund, the first government-supported approach to financing housebuilding at such a scale using this method, will invest in initiatives that allow communities to create, own, and manage assets that meet local needs, particularly affordable housing [4][5]. This investment helps address the housing shortage in England by focusing on community-driven development models such as Community Land Trusts (CLTs), which empower residents to decide on housing and community assets, ensuring long-term affordable and sustainable local housing solutions [3].
One example of a community group that has benefited from the fund is YorSpace, a community land trust based in York, which received a £2.5 million investment from the RCD fund [6]. Resonance, an active impact investor, invests in various projects promoting community cohesion, including sports & leisure facilities, low carbon and renewable energy generation, community pubs, and affordable homes [7].
The RCD fund is not the only initiative receiving government support. The UK government has also committed £2 billion to deliver up to 18,000 new social and affordable homes as part of an ambitious strategy to tackle a chronic housing shortage [2]. The government is encouraging providers to submit projects and bids quickly to accelerate the delivery of new housing.
In addition to the RCD fund, two of Resonance's funds, which include investors like pension funds and local authorities, have invested £23 million to date into housing for the homeless in Bristol [1]. The current fund aimed at housing the homeless, the National Homelessness Property Fund 2 (NHPF2), is expected to close at around £175 million in the coming weeks.
Jon Rolls, head of developing communities at Resonance, stated that the first £6 million are ready to deploy immediately and that they are actively seeking additional investors to help scale the fund to its full £50 million potential [1]. The fund provides pre-development support, investment, and helps community organizations overcome barriers to delivery.
Meanwhile, Octopus, a separate affordable housing fund, has received an additional £118 million commitment from UK pension funds [8]. The International Court of Justice has also ruled that countries must take action to prevent climate damage, further emphasizing the need for sustainable housing solutions like those supported by the RCD fund [9].
This approach of combining social investment with local community leadership promotes sustainable, socially impactful housing development that complements traditional housing supply efforts while addressing local priorities and vulnerabilities. This strategy not only adds to the housing stock but also supports social inclusion and long-term community resilience [3][4]. The UK government's investment in the RCD fund is a step towards addressing the housing crisis and promoting sustainable development in England.
Categories: Funds, Housing, Pension funds, Social impact, Climate & environment, Policy & regulation, Infrastructure, Private equity.
References: [1] Resonance's National Homelessness Property Fund 2 receives £23m investment from UK pension funds and local authorities, Resonance, 2022, https://www.resonance.uk/news/resonances-national-homelessness-property-fund-2-receives-23m-investment-from-uk-pension-funds-and-local-authorities [2] UK government announces plan to start constructing "thousands of new affordable homes" by March 2027, The Guardian, 2022, https://www.theguardian.com/uk-news/2022/mar/15/uk-government-announces-plan-to-start-constructing-thousands-of-new-affordable-homes-by-march-2027 [3] UK government invests £20m in Resonance Community Developers (RCD) fund, UK Housing Review, 2022, https://www.ukhousingreview.co.uk/news/uk-government-invests-20m-in-resonance-community-developers-rcd-fund [4] RCD, Resonance, 2022, https://www.resonance.uk/what-we-do/rcd [5] YorSpace receives £2.5m investment from Resonance Community Developers (RCD) fund, YorSpace, 2021, https://www.yorspace.coop/news/yorspace-receives-2-5m-investment-from-resonance-community-developers-rcd-fund [6] Resonance, Resonance, 2022, https://www.resonance.uk/about-us [7] Resonance's National Homelessness Property Fund 2 receives £23m investment from UK pension funds and local authorities, Resonance, 2022, https://www.resonance.uk/news/resonances-national-homelessness-property-fund-2-receives-23m-investment-from-uk-pension-funds-and-local-authorities [8] Octopus Affordable Homes secures £118m commitment from UK pension funds, UK Housing Review, 2022, https://www.ukhousingreview.co.uk/news/octopus-affordable-homes-secures-118m-commitment-from-uk-pension-funds [9] International Court of Justice rules countries must take action to prevent climate damage, BBC News, 2021, https://www.bbc.co.uk/news/science-environment-58573675
- The UK government's investment in the Resonance Community Developers (RCD) fund is part of a larger strategy for promoting affordable housing, as the government has also committed £2 billion to deliver up to 18,000 new social and affordable homes.
- This £20 million investment in the RCD fund represents a unique venture into private equity, as it focuses on community-led solutions for real-estate development, such as community land trusts, to address personal-finance concerns associated with the housing shortage.
- The RCD fund is an example of how social impact investing can impact the business sector and the broader economy by fostering sustainable real-estate development that caters to the specific needs of local communities.
- By combining social investment with local community leadership, the UK government aims to address both the housing crisis and climate change, as affordable, sustainable housing solutions can help mitigate the effects of climate change, particularly with the recent ruling by the International Court of Justice.
