Octopus Investments, a subsidiary of Octopus Group, has successfully completed the first close of its new affordable housing fund with £50m. This fund, in partnership with London CIV representing 32 local government pension schemes in London, marks a significant step towards addressing the UK’s need for high-quality, affordable housing.

This initial investment is set to facilitate the construction of over 500 affordable homes for families and older persons across the UK. It forms part of Octopus Investments’ broader ambition to fund the creation of 5,000 homes in the coming years. The fund is uniquely positioned to offer co-investment opportunities to local authorities, pension schemes, and other investors interested in local developments, thereby amplifying the total capital dedicated to affordable housing projects.

Importantly, the fund’s focus will not extend to specialist supported housing. Instead, it aims to align with the needs of local communities, fostering collaborations that drive the development of housing schemes in various regions.

Jack Burnham, Octopus’s head of affordable housing, expressed excitement about the potential impact of the initial capital. With the aid of their registered provider, New Arch, Octopus is well-placed to partner effectively with housing associations, ensuring the delivery and management of new affordable homes nationwide. New Arch’s role is pivotal in facilitating a scalable, direct-let model that equitably shares risks with partners while maintaining high standards of accommodation and property management.

Ed Clough, managing director at Octopus Real Estate, emphasised the fund’s alignment with London CIV’s values, particularly in delivering sustainable housing solutions that cater to diverse life stages. The fund prioritises energy-efficient housing and true affordability, ensuring positive social outcomes. As an evergreen fund, it is set to be scaled sustainably over the years, providing long-term support to housing associations and stability for both residents and investors.

This initiative by Octopus Investments represents a proactive step towards meeting the UK’s affordable housing needs, ensuring that quality, sustainability, and affordability are at the forefront of housing development.