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How to invest in property that makes a difference

Earn a steady income by backing social housing projects with these investment trusts

PUBLISHED: 07:42, 15 July 2021 | UPDATED: 07:42, 15 July 2021

More and more savers want to make a positive difference with their investments as well as a financial return.

Environmental issues have been front of mind among investors for some time but the pandemic has thrust other issues into the spotlight. One is housing that fulfils the S part of ESG – social.

There have been concerns for some time about a shortage of affordable homes and social housing in the UK, and while the government has committed money to infrastructure, it is increasingly reliant on private housebuilders and housing associations to plug the gap.

Social housing investment trusts offer retail investors the opportunity to invest in a sector which has to this point largely attracted institutional investment. The listed structure breaks down barriers for everyday investors looking to invest in a good cause while providing a steady income.

Their high yields however have made them a popular source of income for institutional investors and that has forced share prices to a premium above net asset values. Investors must also be happy paying ongoing charges that reflect the specialist nature of the funds.

Investment companies making social impact investments now manage £3.9billion of assets, according to Jura Capital and the Impact Investing Institute, having grown from zero ten years ago.

Social housing has formed a large component of this: local authorities are turning to care providers to manage the welfare of tenants and to housing associations to provide the accommodation. The housing associations lease property on a long-term basis from these specialist trusts.

It is also expanding to cover a wider range of needs including homelessness and addiction.

‘The fundamentals that underpin the supported living sector – namely, the chronic shortage in supply of appropriate accommodation for the delivery of mid- to higher-acuity care… and growing demand; the better health outcomes that specialist supported housing brings to occupants; and the substantial cost saving to government – are only intensifying,’ QuotedData analysts have said.

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