USS makes first investment in shared housing

16 July 2020

USS has made its first investment in shared ownership housing. Ben Levenstein, Head of Private Credit, USS Investment Management, explains why.

As the UK moves beyond the immediate effects of Covid-19, some trends that began long before the pandemic have taken on new meaning now that the country is trying to get back on its feet – the availability of affordable housing being one such example.

Years of missed new-build targets has created a huge shortfall in housing - several million homes now need to be built to meet demand. And of course, for those that are available, spiralling house prices has meant a generation of private renters who cannot afford to buy.

“Build, build, build” is a key plank of the Government’s plan to get people back into work as quickly as possible and urgent reforms have been promised to the planning system as well as a financial boost to the housing sector in the form of the Affordable Homes Programme.

As a long-term investor, USS Investment Management has invested in property for many years due to the steady returns we can achieve which help pay members’ pensions as they fall due. More than that, however, we are also adept at finding ways to invest that not only provide attractive returns but also help us provide some hedge against the future uncertainty presented by interest rate or inflation movements.

Better still is a situation where we can do all that and make a social impact at the same time. That is why, last week we announced our first investment in a company that is creating shared ownership properties. Shared ownership, a type of social housing, allows people to buy a share of a property and then pay rent on the remainder. Because an individual only needs a mortgage for the share they own, the deposit needed is much lower than a typical property purchase. We think this type of arrangement has huge potential to help people who otherwise could not afford to buy their own home. As a result, we entered a £300m, 45-year debt facility with an entity listed on the stockmarket - Residential Secure Income (“ReSI”), which invests in affordable shared ownership, retirement and local authority housing.

With the USS facility in place, ReSI will be able to draw on this money when it finds the right projects to support, and it already has a healthy pipeline of new homes to add to the existing 166 it has already supported.

For ReSI, USS is an ideal investor as we are able to make a multi-decade commitment that allows the team to manage their business more effectively to meet their long-term requirement to develop social housing and then manage tenants.

For USS, we now have an agreement in place that is linked to inflation and gives us an attractive return as well as making a positive social impact.

We are not stopping there but we are actively looking at other opportunities to invest in social housing. The virus brought into sharp relief those struggling to find affordable housing as well as the need to support our key workers with nearby accommodation. We very much look forward to USS playing a key role in making this happen.


Nothing in this article should be construed as an offer, invitation or general solicitation to buy or sell any investments or securities, provide investment advice or to engage in any other transaction or service.

Last updated: about 9 days ago

Simon Pilcher Ben Levenstein

Head of Private Credit
USS Investment Management.