The importance of good housing as a fundamental human need cannot be overstated. It’s a basic human right essential for personal stability, security, and self-respect. But beyond the immediate provision, good housing good housing provides broader societal benefits and forms the bedrock of family life, enabling individuals to thrive, access vital services, and contribute meaningfully to their communities.

However, the gap between the availability of good affordable housing and rising demand, exacerbated by a cost-of-living crisis, has led to an increasing number of families living in substandard or temporary accommodation.

This article explores the critical importance of good housing and its impact on families, highlighting two housing projects that are making a real difference and demonstrate significant Social Return on Investment.

Positive Social Impact of Quality Housing

  • Financial stability
    Good affordable housing is crucial for alleviating financial strain on families. With housing costs often consuming a significant portion of household budgets, access to affordable initiatives enable families to allocate resources towards other essential needs.

    According to the National Housing Federation (NHF), there’s a widening disparity in housing costs between the wealthiest and poorest households. Alarmingly, nearly half of the poorest households spending over 40% of their income on housing, compared to just 4% of income on housing for the wealthiest households. This growing gap underscores the severe financial strain experienced by low-income families, who are left with limited resources for other essential needs such as food and energy bills. This disparity also extends across generations. Stable and secure living environments contribute to social mobility and long-term prosperity. Children raised in good affordable housing are more likely to perform better academically, achieve higher education levels, and secure well-paying jobs, breaking the cycle of poverty and inequality.

  • Health and affordability
    Inadequate housing poses significant health risks. High-profile cases, such as Awaab Ishak’s, have underlined the devastating effects of mould and dampness on health, prompting legislative changes. Overcrowded homes also compound physical health risks. In another NFH survey, 76% of respondents reported adverse physical health effects due to cramped living conditions. Beyond physical health, inadequate housing impacts mental well-being. The lack of dignity associated with substandard housing fosters worry and shame, leading to mental health issues like depression, stress, and anxiety. Research shows that 60% of young people living in inadequate housing feel that this directly negatively affects their mental health. Inadequate housing costs the NHS approximately £1.4 billion annually, with two-thirds of this directly attributed to mould and damp-related issues. Investing in affordable housing can significantly reduce these health burdens.

  • Educational outcomes
    The link between stable housing and children’s educational outcomes is clear. A secure home provides the emotional and psychological stability necessary for academic success. Children living in good homes are able to better focus on their studies, leading to improved academic performance and future opportunities.

    A Shelter survey of teachers revealed several challenges faced by children in inadequate housing. Issues included absenteeism, hunger, tiredness, and arriving at school in unwashed clothing, stem directly from the lack of proper facilities in temporary and inadequate accommodation. Good housing located in low crime and poverty in proximity to good schools and enriched with access to community resources like libraries and extracurricular activities further support a child’s educational journey, underscoring the importance of thoughtful urban and community planning in enhancing educational outcomes.

Innovative housing projects with a social impact

Two innovative, standout housing projects that help address the challenges of good affordable homes are the Goldsmith Street development in Norwich and the Hackney New Primary School & 333 Kingsland Road. Both projects have set benchmarks in integrating architectural innovation with social responsibility, offering solutions that go beyond traditional housing concepts.

Goldsmith Street Norwich – Mikhail Riches with Cathy Hawley

Goldsmith Street in Norwich, awarded the 2019 Stirling Prize is a remarkable example of how innovative architectural design can significantly impact social housing. Developed for Norwich City Council, this project offers 93 home at 100% social rent using the ‘Passivhaus’ method to develop a community-focused environment, setting a new standard for affordable housing.

Residents have testified to the life-changing impact of living in Goldsmith Street from the way in which the design of these Passivhaus homes caps annual energy bills significantly below the national average, alleviating financial stress and allowing savings for other essentials. Moreover, the improved warmth and ventilation have markedly enhanced residents’ health, reducing the need for medications and eliminating damp-related issues prevalent in previous living situations. Such advancements underscore the critical link between well-designed affordable housing and its potential to uplift the financial and physical well-being of its inhabitants.

Hackney New Primary School & 333 Kingsland Road

The Hackney New Primary School & 333 Kingsland Road project stands as an example to the innovative fusion of educational spaces and community living in London’s dynamic urban landscape. Developed for the London Borough of Hackney, this project combines the functional requirements of an outstanding 350-pupil primary school with the complexities of urban housing.

The project capitalises on the limited site area to prioritise educational facilities while ensuring protection from the urban hustle. The development represents a deeper, community-focused approach to learning.

Central to this development is the acknowledgment of the vital link between stable, supportive housing and children’s academic growth. The project offers more than just classrooms and a home; it provides a nurturing environment conducive to learning and personal development, illustrating the profound impact of community planning on educational success.

The project offers 68 new homes ranging from one to three bedrooms, situated above the primary school and a 298m² commercial unit that contributes to the area’s economy.
This project to provide affordable rental homes is a crucial aspect of this development, targeting Londoners on low to middle incomes struggling to find quality housing near their workplaces. This approach addresses a critical need, ensuring that working individuals and families have access to affordable, quality living spaces within the city.


The successes of Goldsmith Street and the Hackney New Primary School & 333 Kingsland Road have demonstrated their significant SROI serve as models for future housing projects. They represent not just a response to the housing crisis but a visionary approach to building resilient, supportive communities where families can flourish.
As such, we call on policymakers, developers, and investors to explore similar initiatives that recognise and leverage the interconnections between housing, health, financial stability, and education, paving the way for a more equitable and prosperous society.

Useful resources

For investors seeking to make a meaningful impact beyond financial returns, understanding the essence and impact of the Social dimension within the ESG framework is vital. In this first instalment of our blog series on Environmental, Social, and Governance (ESG) investing, we delve into the crucial “S” component and the principles to calculating Social Return on Investment (SROI), particularly in relation to social housing.

The rise of ESG investments

In the dynamic landscape of global finance, the emergence of ESG investing has marked a significant shift, highlighting the interconnection between financial markets and broader societal concerns.

The early 2000s were pivotal, prompting policymakers to critically evaluate the role of public services and government actions in fostering public value. This period laid the groundwork for the concept of social value, which was eventually encapsulated in the UK Public Services (Social Value) Act of 2012. This shift aligned with global efforts, such as the UN Sustainable Development Goals, emphasising the need to balance societal well-being with economic progress.

The global pandemic further propelled ESG investing into a new era. As COVID-19 spread across the world, it exposed deep-seated inequalities and vulnerabilities in healthcare systems, labour markets, and community support networks. This unprecedented crisis highlighted the urgent need for resilient social infrastructures that can withstand such shocks and protect the most vulnerable populations.

Investors began to recognise that social factors, such as employee health and safety, equitable access to services, and robust community support, are not only ethical considerations but also critical to long-term financial performance. This shift brought the ‘S’ in ESG into sharper focus, underscoring the fragility and importance of societal structures.

The SROI Framework

Measuring the components of ESG can be challenging and complex. While the environmental and governance aspects are relatively straightforward, with quantifiable metrics such as carbon emissions and company policies, the social pillar is often more difficult to quantify. It encompasses a wide range of factors, including labour practices, community engagement, human rights, and customer satisfaction. Some aspects, like employee turnover rates or diversity metrics, can be measured quantitatively, but evaluating community impact remains qualitative and subjective.

The SROI framework is particularly valuable for calculating the social return on ESG investments. It offers more transparency and accountability, enabling investors to gauge the success of their investments in terms of social outcomes and encouraging further investment.

SROI Principles and practice

Assessing the SROI of a project involves adhering to eight key principles outlined by Social Value UK. These principles guide a comprehensive process, offering deeper insights into social impact beyond traditional financial metrics.

  • Principle 1: Involve stakeholders
    Involving stakeholders means engaging with all relevant parties to ensure diverse perspectives are considered. For example, developers might hold community meetings to gather input from local residents, while also consulting with housing associations, government agencies, and potential tenants. This inclusive approach helps to align the project with the needs and priorities of those it will impact.

  • Principle 2: Understand what changes
    Identifying the social impacts of a social housing project involves evaluating various outcomes. For instance, providing affordable housing could lead to improved health and well-being due to better living conditions, higher educational success among children as a result of a stable home environment, and stronger community bonds through communal spaces and activities. It’s important to track and measure these changes, acknowledging both positive outcomes and any potential negative effects, such as displacement of current residents.

  • Principle 3: Value the things that matter
    Valuing the things that matter requires understanding what stakeholders prioritise. This might involve conducting surveys to determine what residents value most—whether it’s safety, access to public transportation, green spaces, or community services. By integrating these values into decision-making, developers ensure that the project not only meets economic goals but also enhances the quality of life for residents.

  • Principle 4: Only include what is material
    Focusing on material information requires prioritising the most significant impacts. Factors such as the improvement in residents’ health due to better living conditions and access to healthcare services would be considered material. These impacts are likely to influence stakeholders’ decisions significantly, whereas less critical outcomes might be excluded from the primary analysis.

  • Principle 5: Do not overclaim
    To avoid overclaiming, the project should only report on the social benefits directly attributable to the housing initiative. For instance, if the provision of affordable housing leads to a reduction in stress-related illnesses among tenants, this can be claimed as a direct benefit. However, broader societal improvements, like overall economic growth, should not be attributed solely to the housing project without clear evidence.

  • Principle 6: Be transparent
    Transparency involves sharing detailed information about the project’s goals, methods, and outcomes. This could include publishing reports on how data was collected and analysed, and openly discussing both successes and areas for improvement. Engaging stakeholders through regular updates and feedback sessions helps build trust and ensures that the project’s impact is accurately understood and communicated.

  • Principle 7: Verify the result
    Verifying SROI results involves seeking independent assurance from third parties. This might mean having external auditors review the project’s impact assessment to confirm the accuracy of the reported outcomes. Independent verification adds credibility to the claims and assures stakeholders that the findings are reliable.

  • Principle 8: Be responsive
    Being responsive means adapting to feedback and changing circumstances to maximise positive social impact. In social housing, this could involve regularly revising project plans based on tenant feedback or new policy developments. Implementing this Impact Management Approach ensures that strategic, tactical, and operational decisions are aligned with stakeholders’ evolving needs and priorities, allowing the project to remain effective and relevant.


By embracing the SROI framework and its principles, investors can navigate the complexities of social value creation, making informed decisions that align profits with purpose. This contributes to a more sustainable and equitable future, demonstrating that investment can and should go hand in hand with social responsibility. The journey through the ‘S’ in ESG represents a fundamental shift towards a more conscientious investment landscape.

Useful resources

The state of Private Rented Sector (PRS) Accommodation in London: Analysing Trends and Effective Solutions.

The impact of the UK housing crisis is far-reaching, affecting individuals and communities across the nation, notably in London and the Southeast. London, housing almost two-thirds of England’s homeless households, has a homeless population equivalent to towns like Blackburn or Oxford, making it a crisis of national significance. Escalating housing costs, coupled with a scarcity of genuinely affordable homes and unsuitable accommodation, have placed a heavy burden on vulnerable individuals and families.

Adding to these challenges, London’s acute shortage of socially rented homes has led local boroughs to rely on the private rented sector (PRS), which now constitutes 30% of the city’s homes—10% higher than the national average. Yet, within the PRS, which is undergoing significant shifts, questions arise about the present state of supply and its potential impact on tenants.

A joint report by Savills and the London School of Economics titled “Supply of Private Rented Sector Accommodation in London” draws insights from platforms such as Zoopla and Rightmove, along with interviews featuring landlords and industry experts. This comprehensive study indicates a noticeable decline in the number of properties entering the rental market. This emerging trend has sparked discussions and raised concerns, including why landlords are progressively exiting the market, potentially leading to an overall reduction in the availability of rental properties.

Supply of Private Rented Sector Accommodation in London: Key Findings

  • Falling rental listings across all bedroom types, with significant declines in larger properties
  • More rented properties are being listed for sale, potentially impacting demand
  • Asking rents have surged by 20%, and the freeze in Local Housing Allowance (LHA) rates affects affordability
  • Tenant turnover has decreased with tenants staying longer in their rented properties due to limited vacant homes and restricted access to homeownership
  • New buy-to-let mortgages have reduced, and indication that more landlords have left the sector
  • Survey data also indicates that landlords are reducing their portfolios, especially in the lower market segments, impacting the most vulnerable tenants
  • Economic factors are increasing landlords’ costs, impacting lower-income households and local authority supply of properties
  • Amid rising costs and policy changes, landlords’ fears of non-payment of rent and property damage affect letting decisions

Supply of Private Rented Sector Accommodation in London: Recommendations

  • Urgent Review and Long-Term Strategy
    Conduct a cross-departmental review to analyse the impact of recent PRS policies and economic factors on supply. Develop a long-term PRS strategy to ensure an adequate supply of quality homes to meet demand.
  • Enhance Purchasing Power
    Increase Local Housing Allowance (LHA) rates to align with current market rents. Raise the Housing Benefit rebate for councils accommodating households in leased temporary accommodation. Rebase LHA rates to the 30th percentile of current market rents to enhance affordability.
  • Reduce Competition
    Implement agreements to limit competition between public sector bodies in the procurement of accommodations, preventing price inflation through procurement practices.

    Reduce Competition
    Implement agreements to limit competition between public sector bodies in the procurement of accommodations, preventing price inflation through procurement practices.
  • Incentivise Landlords
    Offer financial incentives for landlords to participate in the lower end of the market. Local authorities could provide financial support for property improvements and long-term lower-priced rentals. Consider national tax reliefs or incentives for landlords catering to the lower market segment.
  • Public Acquisition
    Enable local authorities to acquire properties leaving LHA or temporary accommodation sectors. Provide grants or capital funding for these acquisitions to ensure tenants can continue occupancy and maintain the property’s purpose.
  • Address Landlord Anxiety
    Promote networking channels for landlords to access factual information and insights. Establish a pan-London PRS network to develop joint initiatives and advocate for change. Enhance councils’ enforcement activities to reassure landlords about health and safety regulations.
  • Mitigate Fears
    Collaborate with local authorities and DWP to reduce landlord exposure to rent arrears and poor tenant behaviour. Promote deposit guarantee schemes and insurance products tailored for landlords.
  • Regulatory Costs Analysis
    Understand the impact of regulations on various landlord types. Assess the potential effects of the Renters Reform Bill on PRS supply and balance risk and reward for landlords while maintaining quality expectations.

In conclusion, the PRS fulfils diverse housing needs, often compensating for gaps in the property market. While local authorities and housing initiatives depend on a well-functioning PRS to address immediate housing demands, there’s a push for reduced reliance on this sector in the long term by certain tenant groups and housing charities due to ongoing affordability concerns.

The research findings have prompted recommendations for short-term interventions that could alleviate challenges faced by landlords, tenants, and local authorities, safeguarding access to PRS properties for vulnerable populations. However, it’s acknowledged that these recommendations, while essential, won’t fully tackle the complex factors and structural issues underlying the housing crisis.

As the demand for housing continues to outpace the supply, addressing the crisis has become an urgent and complex task that requires innovative solutions and efforts from policymakers, developers, and communities alike.

With soaring property prices, a shortage of affordable housing, and rising interest rates and rental costs, the housing crisis has left countless individuals and families struggling to secure suitable and stable accommodation. This situation has also given rise to a host of challenges, including homelessness, overcrowding, and a widening wealth gap.

The All-Party Parliamentary Groups (APPGs) for Ending Homelessness and Housing Market and Housing Delivery have released the report titled Rethinking Commercial to Residential Conversions. This publication explores the idea of repurposing underutilised commercial properties into residential homes as a potential immediate solution to the crisis.

By examining the viability, challenges and benefits of such conversions, the report aims to offer new perspectives and strategies for addressing the pressing housing challenges in England.

Rethinking Commercial to Residential Conversions: Key findings and recommendations:

  • Commercial to residential conversions can play a vital role in expanding the housing supply
    The report highlights that commercial to residential conversions have the potential to make a substantial impact on increasing the housing supply. In England, an estimated 145,000 genuinely affordable homes are needed annually to combat homelessness, with 90,000 of them designated for social rent. Notably, vacant local authority buildings alone present an opportunity for the creation of approximately 20,000 new residential units through commercial to residential conversions. This underlines the significant contribution that such conversions can make in addressing the pressing need for affordable housing in the country.
  • Government should take immediate action to ensure the availability of affordable housing
    Immediate action by the government is crucial to ensure the accessibility of affordable housing. An essential step in this direction is to priorities the proposal by Vicky Ford MP in the Ten-Minute Rule Bill. The bill suggests empowering local authorities with the ability to mandate affordable housing contributions from conversion projects. Adopting this approach can accelerate the provision of affordable housing and secure a greater number of affordable homes in the near future. This proactive approach would significantly contribute to alleviating the housing crisis.
  • Introduce funding methods to incentivise conversions
    The APPGs advocate for the creation of a dedicated funding pool to facilitate the transformation of vacant commercial properties into residential spaces, with a focus on supporting not-for-profit and community-led organisations. This funding pot would serve as a strong incentive for the adoption of high-quality and collaborative strategies, while also supporting the implementation of pilot projects.


  • Standards need to be strengthened to ensure conversion properties are of a high quality
    The report raises concerns about the substandard quality of conversions, which has been facilitated by Permitted Development rules (PDR), which allow modifications to properties without the requirement of full planning permission. It states that due to the implementation of PDR, numerous past conversions have fallen short of meeting the essential standards for comfortable and safe living conditions. Highlighting this issue, the report stresses the urgent need to strengthen regulations and elevate standards to ensure that conversion properties adhere to stringent criteria, promoting the provision of high-quality, habitable, and secure homes.
  • Local authorities also need to have greater input over where the conversions take place
    Granting local authorities greater influence in the decision-making process regarding the locations of conversions is crucial. Local authorities will take into consideration factors such as housing demand, existing infrastructure, and the potential impact on the local community, and thus ensure that conversions contribute to the holistic development and revitalization of their respective areas. This involvement will enable more informed and context-specific choices that will align with the overall goals of local communities and promote sustainable growth and regeneration.
  • Individual councils should have the ability to set affordable housing requirements to meet local need
    Recognising the regional variations and unique challenges in housing needs faced by local communities, it’s important to grant individual councils the authority to establish affordable housing requirements that align with local demand. This approach acknowledges that a one-size-fits-all solution may not effectively address the diverse housing challenges across different regions. By allowing councils to consider factors such as local income levels, housing market conditions, and population demographics, they can tailor affordable housing mandates to suit the specific needs of their communities, ensuring a more targeted and effective response to the pressing housing issues faced by individuals and families in different areas.

In conclusion, the report provides valuable perspectives on the complexities and possibilities of converting commercial properties into residential units. It also serves as a valuable resource for local authorities, policymakers, developers, investors, and communities striving to address the housing crisis through innovative solutions to meet the growing demand for residential accommodations.

Read the full report here

You know there’s a problem in the private rented sector when letting agents start talking about the unaffordability of properties for their prospective tenants. 

Agency chain Hamptons recently released research that sounded the alarm that households are about to be hit by ballooning energy bills and other cost of living increases. 

Generally, agents can be relied on to talk up the market to their clients. Could Hamptons be hinting to landlords that they should lower their expectations? The ongoing demand for properties in London suggests not. But perhaps we are nearing the limit of what tenants can afford.

Homeless charities have long highlighted the affordability gap for low-income families who spend a disproportionate amount of their household income on rent. Consumer champion Martin Lewis, the money-saving expert, has also sounded the alarm on the impact of rising energy bills and the cost of living.

Ironically, London renters may not feel the impact of bigger bills because their rent is already so high! In percentage terms, a jump in energy bills will have less impact on their overall cost of living. 

Nonetheless, London tenants are set to spend 55% of their household income on rent and bills in 2022. For households on very low incomes, paying over half your income on rent simply does not leave enough to live on.

As readers of this blog will know, councils are increasingly turning to selective licensing schemes in parts of their boroughs. They tend to licence areas with a high proportion of households claiming benefits so if your properties are in selective licence areas, your tenants are more likely to be affected.

So what can be done about the problem Hamptons has highlighted?

Capital Letters was set up to find private rented properties for people on the edge of affordability. These are the ones that councils have a legal duty to house such as families in temporary accommodation or facing homelessness. 

As demand for properties continues to outstrip supply, finding properties at LHA rates, the proxy for affordability, was already challenging. Nonetheless, many landlords have developed sound businesses by letting some or all their property portfolio to families claiming benefits.

Our one-stop service focuses on taking the hassle and risk out of letting to tenants in the benefits system. We offer landlords upfront incentive payments and help both landlords and tenants navigate the benefits system. 

We generally succeed in preventing tenancies from failing by ensuring benefits claims are completed correctly at the start of the tenancy and helping set up utilities and rent payments.

Looking ahead to a tough year for some tenants, more active support may be needed to help families on low incomes or benefits bridge the affordability gap. Our tenancy sustainment team already respond quickly to the warning signs of a tenancy in trouble. We will be even more alert in the current challenging environment.

Recent research by York University found that landlords letting to low-income families used active tenancy support to reduce the risk of arrears. Others recognised they did not have the time or skills, and use intermediaries such as Capital Letters to support tenancies.

We think that as affordability pressures increase on households on low incomes, some form of active tenancy support will become even more essential as the rising cost of living squeezes households.

Capital Letters is ready to help, but one way or another, landlords will have to find ways to support tenancies to ensure they are successful.

The debate about who and where is being levelled up started in earnest when the Government published its white paper, including a pledge to get private rented houses in order. 

The government press release contained pledges related to the private rented sector, though we need to wait for another white paper on renters reform to see the detail. 

However we know enough to applaud the commitment to reducing the number of homes in the PRS that fail the decent homes standard. 

The proportion of PRS homes that don’t meet the standard halved over the last decade and the government has pledged to halve it again by 2030. This is good news. The landlord sector has done a lot to improve standards but the promised crackdown on bad landlords is necessary.  

Nearly a quarter of properties in the PRS do not meet the decent homes standard. Households receiving benefits who have fewer housing options are most likely to live in sub-standard homes. 

London councillors and parliamentarians have been quick to point out that levelling up isn’t a north-south issue. There are 165,000 Londoners in temporary accommodation, which accounts for two-thirds of the total in England. These households, many with children, need levelling up too, say a London Councils and London MPs. 

Capital Letters was created by councils in London to find private rented properties so families could move out of temporary accommodation. Finding properties at local housing allowance rates remains challenging as the privately rented market becomes more buoyant. 

The latest government homelessness figures released last week showed that the private rented sector is now providing housing for proportionally more families at risk of homelessness.  

The PRS has grown steadily over recent times; we need it to play a larger role in offering homes to families who are either in temporary accommodation or at risk of homelessness.  

In 2019, social housing accounted for about 60% of discharges of main duty by councils in London with that number already starting to fall before the pandemic. By autumn last year, less than half (46%) of discharges were to social housing, while the use of the PRS nearly doubled to about 30% of discharges of main duty. 

To meet the government’s objective of improving standards in the PRS while reducing the alarming numbers of people in temporary accommodation, particularly in London, requires collaboration with private landlords, councils and the government.  

The recent National Audit Office report on private renting concluded that government must do more to support local authorities determined to improve standards in their area. The next white paper will need show how this can be done, including the expected national landlord register. 

In fact, Capital Letters only accepts properties that meet the higher quality and safety criteria demanded of our member councils. We work with landlords who provide good quality properties – so families have a safe and secure home to put down roots. There just needs to be more of them.