A company that works with private landlords to supply homes to ease London councils’ homeless issues, has won funds to secure 4,000 homes over the next four years.
The company - Capital Letters - is in advanced negotiations with private investors who would inject around £1.5 billion to acquire the 4,000 units.
Over half would be let at local housing allowance rates to low-income families through councils in London. The remainder will be split between market rent and sub-market rent for key workers such as teachers and nurses.
Capital Letters was set up in 2019 by a group of London councils to help to tackle the homelessness crisis by increasing the supply of properties from private landlords so families can move out of temporary accommodation or avoid homelessness.
The new investment model would enable Capital Letters to lease the properties from the investor companies to become a landlord with responsibility for managing the properties. Its successful tenancy sustainment service would be offered for all properties let through councils.
QSix, an established real estate asset manager, is one of the investors working with Capital Letters to develop new public/private investment models that would expand capacity to tackle homelessness in London.
There are currently 60,000 households with 86,000 children living in temporary accommodation in London.
An advantage of Capital Letters is that member councils can secure significant savings by moving families from expensive nightly-paid B&B and other temporary accommodation into secure homes.
Sue Coulson, chief executive of Capital Letters, says: “We’ve seen that demand for rented properties in London is growing strongly again, pushing up rents, which is bad news for families in temporary accommodation or at risk of being made homeless.
“That’s why Capital Letters has been developing a separate landlord business to increase the supply of good quality rented properties available to low-income families that London councils have a duty to house.
“By combining their future demand through Capital Letters, our member councils have created a single, simplified investment vehicle that will help to tackle the homelessness crisis head-on. Our investors can be confident about steady demand, while councils will be able to access a predictable supply of properties at an affordable rent.”
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