Building Homes, Building Futures: How Trusts and Foundations Can Invest to Address the Housing Crisis 

The UK’s housing crisis is increasingly being recognised not only as a social challenge, but a long-term investment opportunity for those seeking measurable impact. Rising rents, funding pressures on local authorities, and growing demand for affordable and supported housing are creating a strong case for trusts and foundations to deploy capital in ways that deliver both social value and sustainable returns.

This joint article from Mercer and Association of Charitable Foundations (ACF) explores how philanthropic investors can support housing solutions that increase the supply of affordable and quality housing while contributing to stronger local economies and more resilient communities.

Across the UK, local growth plans are placing housing at the centre of economic regeneration. Combined authorities and local councils are increasingly linking the benefits of affordable homes to broader objectives including employment, health outcomes, skills development and town-centre renewal. Investment into housing is no longer viewed in isolation; it is now part of a wider “place-based” strategy designed to both strengthen communities and reduce public spending pressures over time.

For trusts and foundations, this presents an opportunity to align endowment capital with mission objectives. Affordable and social housing has become one of the fastest-growing pillars of place-based impact investing in the UK, particularly among institutional investors seeking stable, long-term returns alongside measurable social impact. Housing assets have the potential to offer resilience, secure inflation-tracking income and diversification, while also helping address one of the country’s most pressing social issues.

While large-scale developments remain necessary, community-based approaches are especially important. Taking homelessness as an example, many successful homelessness initiatives are rooted in locally embedded housing models. These include community land trusts, supported housing partnerships, homelessness property funds and housing-led services delivered alongside charities and social enterprises. Such approaches recognise that reducing homelessness requires more than simply increasing housing supply; it also depends on creating supportive, connected communities, that unlock solutions at the right scale.

Alongside community-led housing, a quieter but growing part of the system is the “social purpose” private rented sector. Across the UK, charities, social enterprises, ethical landlords and local partnerships are using private rented homes to support people at risk of homelessness, combining affordable rents with tenancy and wraparound support.

Many of these models depend on patient capital and mission-led investment. Examples include Homes for Good in Scotland, and Canopy and Giroscope in England, which show how modest funding can bring homes into use quickly and reduce pressure on local authorities. 

For foundations, this is a strong mission-aligned investment opportunity: delivering social impact now while building long-term assets and sustainable income, and helping scale an important but under-recognised part of the housing system.

Impact investment in housing can play a transformative role. Through its sustainable and impact investing work, Mercer supports investors when setting investment objectives and aligning capital with measurable social outcomes. Mercer’s approach emphasises defining clear ambitions, identifying and partnering with specialist managers, generating financial returns alongside social outcomes, and implementing credible reporting structures. 

For trusts and foundations considering investment in this area, several factors deserve careful attention;

As more foundations explore mission-aligned investing, housing represents a compelling opportunity to combine sustainable, long term returns with social impact. By investing in community-led and locally connected housing solutions, trusts and foundations can help unlock long-term change.

To support this conversation, Association of Charitable Foundations (ACF) and Mercer recently hosted a webinar on Investing in Homes to Address the Housing Crisis: Opportunities for Trusts and Foundations. The session explored local growth strategies, community-led housing models and the evolving role of impact investment in creating sustainable housing solutions. From across the housing, philanthropic, and investment sectors, speakers Hill Gaston, Head of Impact Strategy at Mercer; Jon Rolls, Head of Developing Communities at Resonance; and Sian Edwards, Acting CEO at Andrews Charitable Trust, shared practical insights for foundations considering how their capital can support both financial resilience and lasting social change.