Against a background of chronic shortages of affordable rental properties in metropolitan areas including London, Capital Letters, an independent commercial not-for-profit company owned by London boroughs and the registered housing charity Home Safe Housing, is bringing up to 2,500 high quality affordable rental homes to London in a ground-breaking partnership.
There are over 60,000 households in London that are experiencing homelessness, and there has been a 70% increase in the number of families in temporary accommodation over the last 10 years. This is at a time when the number of new affordable homes being built is collapsing – there has been a year-on-year drop of 76% in the new homes being built by the capital’s largest Housing Associations.
Against this backdrop Capital Letters and Home Safe Housing are finding new ways of bringing homes into the rental market, by delivering good quality affordable homes to tackle London’s housing crisis.
Each of the 2,500 homes will be refurbished by Home Safe Housing and brought up to Capital Letters Agreed Standard and EPC C or above as part of its £750m investment.
The majority will be let at LHA (Local Housing Allowance) rates to households in London who are experiencing homelessness, providing vital safe, secure, and affordable homes. The market rent properties will be offered on the open market; they will also be available to Capital Letters’ member boroughs, and they will be able to nominate working families who are experiencing homelessness for those homes.
Ambitions
“This partnership with Home Safe Housing is a great for London families,” said Capital Letters’ Chief Executive Sue Edmonds. “When Capital Letters was created, it was intended that the Company would be a landlord and with Home Safe Housing it can now successfully achieve its ambitions.”
“The focus in Capital Letters’ early years has been on successfully procuring nearly 6,500 homes for our member boroughs to use for homeless families who desperately need them. We achieved this success by working with individual landlords. Now the London rental market has changed so dramatically, we have focused our service on being a great landlord and providing these homes ourselves, which is a better way of meeting the increasing demand. This groundbreaking partnership with Home Safe Housing is the latest step in that strategy.”
The registered charity Home Safe Housing was conceived by Prowgress, a Hague-based social impact fund, and UK Structured Finance, a social investment banking boutique, to deliver affordable homes across England.
Home Safe Housing CEO, Jared Fox, said “We are delighted to be partnering with Capital Letters on this initial £750m investment in London’s social housing stock. As a not-for-profit company Capital Letters shares our social mission of alleviating homelessness and has the pedigree to ensure a robust and well governed project.”
“We know that together we can ensure the investment made will change lives for families in London, with thousands of homes being added to London’s affordable housing stock in perpetuity and that the project remains financially viable for investors.”
Value
Sue Edmonds, Capital Letters CEO said, “Capital Letters exists to help alleviate homelessness and to provide increased value for money to the public purse. By partnering with Home Safe Housing and having a mixed economy portfolio, which includes market rent as well as Local Housing Allowance (LHA) rent homes, we can work together to support Capital Letters’ member boroughs, providing affordable housing to alleviate homelessness, built on a sustainable, financially viable independent business working with a like-minded ESG investment partner.”
The initial 2,500 properties will be procured over the next 2 – 3 years in a leasing deal that will run for the next 40 years with Capital Letters able to purchase some of the properties for £1 at the end of the period, ensuring that these homes will remain available to Londoners in perpetuity.
Paul Doe, Chair of Capital Letters Board of Directors, said “This deal shows the strength and ambition of Home Safe Housing and Capital Letters and the determination of both partners, to achieve their shared vision. This is what Capital Letters is for, to find ways to bring long term, good quality, affordable housing to Londoners in need whilst reducing the financial pressure on member boroughs.”
Cllr Meric Apak, Cabinet member for Better Homes, London Borough of Camden and Chair of the Capital Letters’ Boroughs Representative Body – the body that works with Capital Letters Board of Directors and Executive on behalf of the 10 Member Boroughs – said “This is the culmination of a lot of hard work and effort. To see it come to fruition is excellent, because this partnership between Capital Letters and Home Safe Housing means more affordable homes for people in need in London.”
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