Housing Housing

Investing to address the supply and demand imbalance in the UK housing sector.

Investing to address the supply and demand imbalance in the UK housing sector.

Our Housing strategy aims to deliver superior financial returns alongside a positive social and environmental impact.

A combination of the UK’s demographic make-up and historic lack of investment has contributed to a continuing supply and demand imbalance in the housing sector. We believe there are a wide range of investment opportunities available to provide our clients with asset-backed income generation. We offer long term equity investments into housing in the United Kingdom, through listed and unlisted housing investment vehicles. In addition, we provide expert advice, analytical tools and sophisticated solutions for housing providers, including bank funding, derivatives resolution, debt capital markets and treasury systems.

Why invest in Housing?

House completions are currently significantly below both historical averages and the UK’s requirement. In addition, Government grant funding, traditionally the equity for investment in social housing, has reduced.

Investments in this area can benefit from substantial asset-backing and in turn provide investors with attractive long-term cashflow, which itself benefits from:

  • The defensive nature of the underlying assets
  • Downside protection from the underlying asset cover
  • An attractive income stream that is often inflation-linked

Investments in housing also have strong and quantifiable positive social benefits.

Our focus

Our housing investments focus on two key areas of the UK market;

  1. The less-competitive end of the UK market where investments are below £50 million. This is a more fragmented space than ‘traditional’ larger investments, due, in our view, to the resource-intensive nature of the investment process required to shape and deliver deals. The investment team’s extensive industry experience and network of contacts and advisors position Gresham House well to realise the best value for clients allowing the team to take advantage of capital-intensive opportunities that typically require a long-term investment horizon and significant upfront investment of time.At this level we focus on long-term direct investments into housing in the UK, as well as into companies that operate in the broader housing sector, such as small regional house builders.
  1. The social housing sector, which has a huge demand for new long-term capital to alleviate the shortfall in new housing supply. Our investment approach provides equity to Housing Associations (HAs), with alignment of interests and in partnership with them to allow the HAs to free up financial capacity and meet development ambitions. We provide fresh equity and subsequent value to investors through this approach, in three ways:
    • Shared Ownership – which provides capitalised, up-front value from rental income with a share of any additional profits from staircasing
    • Purchasing new developments – capturing the opportunity to convert open market homes to Shared Ownership homes
    • Funding new developments – converting open market homes to Shared Ownership and delivering S.106 schemes

This strategy seeks to provide stable rental income to investors by holding assets in perpetuity and not looking to trade assets for short-term gains.

The debt and corporate advisory solutions offered by the TradeRisks team provide a range of services to clients in the Local Authority market.

Services include:

  • Bond arrangement
  • Debt advisory
  • Treasury management
  • Custody and business plan reviews

The local authority sector is well-positioned to benefit from innovative financial ideas given the challenging environment of government spending cuts.

Utilising the capital markets enables Local Authorities to structure their debt in a way that suits their funding requirements more closely than traditional PWLB loans.

The team has long-term relationships with leading UK Local Authorities and is a leading arranger of long-term financing for HAs, Local Authorities, care homes and university accommodation.

How can I invest in Housing?

Investors can access Gresham House’s Housing equity investment opportunities via our listed housing vehicle, Residential Secure Income plc, through Unregulated Collective Investment Schemes (UCIS) or via co-investment opportunities.

For information, please contact:

Heather Fleming, Head of Institutional Business
+44 (0)20 3873 5908
h.fleming@greshamhouse.com

Catriona Buckley, Institutional Business Development Director
+44 (0)20 3903 0573
c.buckley@greshamhouse.com

 

For information about our debt and corporate advisory services, please contact:

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Our Housing funds and advisory services

Residential Secure Income plc (ReSI)

A closed-ended investment company which aims to deliver secure income returns by investing in shared ownership and rental portfolios of homes. For more information visit Residential Secure Income plc.

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TradeRisks Limited

The leading integrated debt advisor for the social housing, social infrastructure and public sectors.

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Investment team

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