Perspective

UK Social Supported Housing - A highly resilient, income-focused sector in an uncertain environment?

The key characteristics of Social Supported Housing (SSH)

  • The UK Government has a statutory responsibility to provide the existing and future population of working-age adults with life-long care needs (primarily those with mental health illnesses) with long-term, safe accommodation under the Care Act 2014.
  • This is a distinct category of social housing, separate from ‘registered care homes’, sheltered housing, hostels for homeless people and affordable housing. The key difference being that the costs are fully-backed by the Government.
  • There is a chronic lack of suitable, modern accommodation that is designed with integrated technology specifically for residents’ requirements. SSH in a community setting supports residents’ increased independence which, in turn, has a positive impact on their quality of life, wellbeing and reduces their reliance on National Health Service (NHS) services.
  • The Government does not have the funding or borrowing capacity to build this accommodation and it is closing older units which are no longer fit for purpose. It is therefore seeking private sector capital to build new accommodation which it will indirectly lease on a long-term, FRI/NNN basis. Such arrangements offer a significant saving to the public purse with typical cost reductions of 11% and 55% respectively compared with registered care home and in-patient alternatives1.
  •  With such a favorable demand and supply dynamic the long term, high-quality, inflation-linked nature of the cashflows make the economic investment case highly compelling, especially when they are not correlated with the economic or property cycle.

1 Mencap and Housing LIN Report, April 2018 (care and accommodation combined).

Please find the full paper below

The views and opinions contained herein are those of Schroders’ investment teams and/or Economics Group, and do not necessarily represent Schroder Investment Management North America Inc.’s house views. These views are subject to change. This information is intended to be for information purposes only and it is not intended as promotional material in any respect.