Institutional funding: the way forward for housing associations

Five years ago, when we announced a partnership with M&G Real Estate to create a £500m shared ownership investment fund, more than a few eyebrows were raised. Despite government backing, including £10m from Homes England, some in the sector were anxious.

That’s because, until relatively recently, bringing outside equity into regulated housing wasn’t really a thing. And historically, we hadn’t needed to. But cuts to social rent in the mid-2010s, combined with an increasing (and correct) focus on building safety, left many providers facing real funding challenges.

New funding sources

Housing associations have a genuine mission to provide affordable housing and above all, to support households of all shapes and sizes. To help us continue to meet this core purpose, just as any investor should always think about “diversification” of their assets, it makes sense for the affordable housing sector to think about diversification of funding.

Our most recent partnership, which we launched in March 2026, is with a similarly high-profile insurer, Legal & General (through L&G Affordable Homes).

While M&G’s venture with us included backing from prominent local government pension schemes, L&G’s venture uses pensioner savings from its annuity portfolio. I would argue that, when you consider income consistency, risk-adjusted return and social impact together, there’s no better investment for this kind of capital than affordable housing.

Fund managers can’t go it alone

This may lead some to think, ‘do we really need housing associations at all, if fund managers and insurance companies can do it all?’.

But the answer is clear: we absolutely do. We know from owning or managing around 130,000 homes across the country, and through the wider 350,000 properties we provide neighbourhood services to, that you can’t look after people’s homes with a spreadsheet.

Suffice to say, customer service sits front and centre of what we do, underpinned by our long-term commitment to our social purpose.

Of course, nobody gets everything right every time, but our most recent Regulator of Social Housing ratings (with top G1 and C1 scores for governance and consumer outcomes) underline the amazing job our 5,000 plus colleagues do every day.

And it’s no secret that, with many of the funding cuts to local authorities and charities, We, and other housing associations, have been having to fill in the gaps for many years, supporting with everything from social work to funding school uniforms. The presence we have in communities makes a huge impact, and this ability to change lives should be a major consideration in investment decisions as well.

Indeed, as part of the reforms we’re seeing to local government pension schemes, generating local impact is increasingly a focus, with administering authorities now required to set a target for local investment.

The ‘halo effect’ of building more affordable housing couldn’t be clearer. Across the sector, research shows social tenancies generated an estimated £87bn of social value annually in England in 2025, with an average of £20,216 per tenancy per year. For Hyde, that figure rises to £31,703, as we often provide homes in areas with high affordability pressures.

Our ability to have a variety of separate ventures with major institutional players will, I think, become a template for how we have to move forward, when public subsidy is limited, and institutional funding has a growing appetite for housing.

We’re a diverse organisation, albeit with a very simple strategy: when people ask me what I do, my answer is we try to grow as much as we can, so we can invest into building as much affordable housing as possible and in improving services.

Through having a genuinely national, integrated platform able to both manage assets and investments at scale, we want to do more of these deals as capital gets comfortable with the sector. In a landscape where secure income is in short supply, the consistency and social impact of affordable housing cannot be undervalued.

A version of this article first appeared on Green Street News on 27 July 2026.