Octopus Capital has raised an additional £100m for its affordable housing fund.
The latest funding round includes £50m from the Scottish National Investment Bank, with the remaining capital coming from a US public foundation.
In a first for the fund and Scotland, the bank’s investment will introduce an intermediate rent tenure where both rent and energy costs will be discounted by around 20% compared to market renting. The bank’s capital will all be deployed in Scotland and will enable a minimum of £100m to be invested in Scottish developments. The homes will be offered to key workers on a first priority basis.
Jack Burnham, head of affordable housing at Octopus Capital, said: “Our aim for this year was to double the size of our affordable housing fund, and we’re so pleased to welcome our new investors into the fund, enabling us to close in on our next £500m milestone. This new capital also presents a few exciting firsts; the investors are from new types of institutions to those in the fund already, building our growing group of those looking for resilient income and long-term social impact.
“This also marks our first time investing specifically into Scotland and its discounted market rent housing. We’re hoping to transform communities there, providing energy-efficient, future-proofed housing to those that need it most.”
Nigel Banks, zero bills director at Octopus Energy, added: “For too long, people have had to choose between affordability and sustainability. Zero bills homes remove that trade-off – they’re cheaper to live in, better for the planet and powered by the latest clean tech. This investment into the Octopus affordable housing fund means thousands more people will be able to move into homes where they won’t have to worry about home energy bills. It’s a game-changer for renters and homeowners alike.”
Nicola Douglas, executive director – sustainable investments, at Scottish National Investment Bank, said: “The affordable housing fund is a brilliant example of the innovative approaches – to both securing capital and ensuring homes are affordable – that we need to deploy at scale. Octopus Capital’s approach to sustainable building and discounting both rent and energy takes a holistic approach to addressing cost-of-living pressures.
“We were also attracted to the fund’s approach to regenerating sites, utilising local supply chains, and supporting social inclusion. We are delighted that our investment is helping unlock a further £50m through the Fund for Scotland.”
