Politics Home | Housing insecurity is not inevitable: here’s how social impact investment can help tackle it

Temporary accommodation (TA) is no longer a stopgap – it is the fastest growing housing tenure in the United Kingdom, with councils in England spending £2.8bn a year on TA.¹ The cost to families is higher still, with more than 134,000 households, including circa 176,000 children,² living without a stable home and the conditions needed for good health, steady work, or financial security.

New findings from our Better Society Index, a nationwide audit of housing insecurity, show that instability affects far more people than official figures reflect. More than one in four people (27 per cent) report that they or someone close to them has experienced housing insecurity in the past five years, rising to 41 per cent among young people. Public understanding of funding streams – and the limits of current resources – remains low.

Yet over the past decade, evidence has emerged that better, more cost-effective alternatives exist. Social impact investment brings in capital from outside the public purse, including from pension funds, trusts and foundations, and financial institutions, giving councils access to funding they would not otherwise have. Critically, it also funds the wraparound support that statutory budgets do not cover – mental health services, tenancy support, and the practical help that keeps people housed and out of crisis. This money is channelled into proven models led by housing associations and charities, expanding the supply of safe and stable homes.

These models are already working at scale. Homelessness property funds run by Resonance, Social and Sustainable Capital, and Bridges have kept more than 3,300 people out of TA, generating £140m in savings for taxpayers from reduced costs in healthcare, mental health services and the criminal justice system.³ Strong evidence also comes from the MHCLG backed Social Investment Pilot (SIP), delivered during Covid-19. The pilot combined a £25m government grant, matched by Better Society Capital, with £215m of additional investment, including £85m from Local Government Pension Schemes (LGPS).4 Independent evaluation by Manchester Metropolitan University showed improvements in tenancy sustainment, wellbeing and service efficiency, and substantial cost savings to taxpayers compared to private rented or TA provision. 

A complementary model, social outcomes partnerships (SOPs), sees government and/or local authorities commission outcomes for people with complex needs before they reach crisis point. Charities or social enterprises can receive upfront working capital from socially motivated investors to deliver services supporting these individuals. Government outcomes payments are only made once independently verified results are achieved, meaning the financial risk sits with investors rather than the public purse. Successful programmes such as Greater Manchester Better Outcomes Partnership (GMBOP) and Kirklees Better Outcomes Partnership (KBOP) demonstrate that outcomes-based commissioning improves service quality and reduces long-term public costs; independent research shows every £1 spent generates £9 of public value.⁵ The £500m Better Futures Fund, announced by the Chancellor and due to launch in the coming months, creates the conditions to scale these approaches. MPs have a role to play in ensuring the Fund delivers for their constituents by championing local engagement and raising awareness.

Housing insecurity on this scale is not inevitable, with proven models increasing the supply of safe, stable homes and supporting people before instability becomes crisis. If government wants to reduce housing insecurity and spend public money more effectively, the path forward is to scale models already working and bring social impact investment into the mainstream of UK housing policy.

To find out more about BSC’s work on homelessness, please visit www.bettersocietycapital.com/our-approach/housing or reach out to [email protected].

Better Society Capital is a social impact investor, deploying capital through fund managers, social banks and intermediaries, and working with government and social sector organisations, to tackle the most pressing social challenges facing the UK.

References

1. Shelter; Bill for homeless accommodation soars by 25%, hitting £2.8 bn. 18 Sept 2025

2. MHCLG; Statutory homelessness in England: July to September 2025. 26 Feb 2026

3. Resonance; Better Society Capital & Alma Economics Report

4. Better Society Capital; Study finds Social Investment Pilot continues to increase support for people with experience of homelessness. 03 April 2025

5. Better Society Capital; New research shows how outcomes contracts can save the NHS. 11 June 2024