Putting the ‘S’ in ESG – supporting the development of social and affordable housing across the UK

Our Head of Debt Finance, Ben Barbanel, discusses the housing crisis and the important role lenders such as OakNorth Bank can play in helping to address it.

Since OakNorth Bank launched in September 2015, we have lent over £7.5B pounds to businesses across the UK and across a variety of sectors, directly contributing to the creation of 34,000 new jobs and 25,000 new homes – of which the majority are affordable or social housing[1].

According to a report earlier this year from the House of Commons, there is a backlog of demand for housing for people who are currently living in unsuitable accommodation. With the heightened cost of living and rising inflation, many are unable to afford the housing they need. According to one estimate commissioned by the National Housing Federation and Crisis from Heriot-Watt University, c.340,000 new homes need to be built in England each year to keep up with demand, of which at least 145,000 need to be affordable. A combination of COVID, labour shortages from Brexit, increasing material costs due to inflation and ongoing supply chain issues, and less appetite from banks to lend due to recession fears, means the country is falling drastically short of this target. 

As a responsible lender, we’ve always strived to lend to developers and housebuilders who have made social and affordable housing a core part of their offering, and that are building homes that are genuinely affordable to those on low incomes, rather than simply building developments with the minimum required number of affordable homes needed to secure planning permission from the Council.

For example, in the past, we’ve supported businesses such as: Pocket Living which creates well-designed, local and affordable homes for first-time buyers, to develop hundreds of new affordable homes in South London; Affordable Housing & Healthcare Group, a business working in partnership with the NHS to cure the housing crisis, to develop three new affordable retirement schemes; Montreaux, a leading property investment and development company, to develop hundreds of new affordable homes in North London; and Nine Points Property, a business which acquires care homes, residential properties, and commercial buildings, and refurbishes them into care homes for young adults, family assessment centres, and specialist schools. 

Earlier this year, we lent £40M to Grosvenor Hill, a social impact investment group, to build its portfolio of social housing residences. Two months later, we lent another £40M to Newcore Capital Management, a Certified B-Corporation, to support the growth of its fifth value add social infrastructure fund, which invests in assets that deliver essential services to society, but require repositioning, modernising, or refurbishment to bring them up to institutional and future-proof quality.

These examples demonstrate that lenders can play a vital role in the “S” of “ESG” (social) and enable the UK to tackle the housing crisis even if they’re not directly lending to the end-resident.

To find out if OakNorth can help finance your next social or affordable housing project, please get in touch. Furthermore, if you’re looking to fund your next residential property investment project with a loan between £250k to £3M, find out more about our residential property offering.


[1] Affordable or social housing is classified via the maximum property purchase price by region under the Government’s Help To Buy scheme – https://www.gov.uk/help-to-buy-equity-loan


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