The feel-good factor of social impact investing is providing much needed revenue for the public-sector.

70 years ago, Britain emerged blinking through the brick dust and rubble of a post-war society. Against the odds, the country rebuilt itself against a backdrop of food rationing, shortages and crippling austerity.

Out of these ashes came investment and growth with bold innovation such as the establishment of the National Health Service (NHS), an institution that has been the envy of the world. The housing market also benefited too with the post war housing boom peaking at 400,000 new homes per year in the 1960s.¹ 

By 2019, the NHS is at breaking point and the housing market is desperately short of affordable properties. What has happened to our rich legacy and is it in danger of being lost?

Well, there is a viable solution and it’s coming from private capital. The Affordable Housing and Healthcare Group (AHH) has spent the last 20 years aligning the interests of the NHS and local authorities with capital investors and home buyers.

Investing in the health of the nation

It’s by working together that they’ve identified that surplus NHS land has huge benefits that can be unlocked to create vibrant communities for older people with close access to healthcare and a range of community facilities. In creating joint venture partnerships, AHH is providing the funding, planning, design, construction and management of associated risk.

There is no charge to the NHS in creating these facilities on behalf of the joint venture. Interestingly, all profits are shared on an equitable basis, in addition to retaining long-term ownership of the assets, NHS Trusts enjoy ongoing revenue streams and capital receipts that typically exceed the straight disposal value of the land assets by two to four times.

This represents a unique opportunity for individual investors to play a role in contributing to the greater good. AHH’s direct-flow investment structure allows for a safe and sustainable return that is both ethical and takes advantage of available tax reliefs such as Business Property Relief which provides shelter from inheritance tax.

Working together to bring positive change

In an environment where public capital is severely constrained, this offers an important route to NHS Trusts to secure capital to help provide new facilities for patients and staff. This is best illustrated with The Royal Bournemouth and Christchurch Hospitals NHS Trust who have formed a joint venture with AHH to utilise surplus land and property assets.

This revolutionary investment model has so far built and operated a care home and specialist supported retirement residences, sharing profits and capital gain and helped to create a modern health campus that provides much needed affordable housing and healthcare services for the elderly community.

The impact has also been extraordinarily beneficial to NHS patients. The hospitals have been able to use the revenues generated to build enhanced healthcare facilities such as a new GP surgery, community pharmacy and radiology unit.

Providing solutions in a responsible way 

The benefits are clear to see and already helping the NHS and Social Services in a variety of direct and indirect ways. Research shows if one couple for every 50 older homeowners moved into a new unit of specialist retirement housing for at least 10 years, this would yield savings in the long-term of £14.5 billion across the country.²

With a replicable model for the redevelopment of further surplus land across the UK health system and ensuring that the NHS is not exposed to any risk, this is a very exciting example of how private investment in the public sector can make a real difference.

The living legacy of the NHS is that we have a large, ageing population. This should now be celebrated and better served with smarter housing that has easier access to healthcare.

More than a financial return. AHH are honouring the decades of NHS heroism and forward-thinking ideas with a solution that benefits everyone in society.

How to make a difference

To find out more about their plans to meet the UK’s housing and healthcare challenges, the Affordable Housing and Healthcare Group is running two exclusive Estate Planning Seminars on 8th and 14th May 2019 at Home House in Mayfair. This is a strictly limited opportunity and there will be only 100 places at each of the two presentations, so you’ll need to reserve your place as soon as possible by visiting the special registration website www.AHH.org.uk/events

'This is an Affordable Housing & Healthcare Group Paid Post. The news and editorial staff of the Financial Times had no role in its preparation.'

Sources

1. The Guardian: A brief History of British Housing: https://www.theguardian.com/business/2014/may/24/history-british-housing-decade
2. Housing Learning & improvement Network: Demonstrating the Health and Social Cost-Benefits of Lifestyle Housing for Older People 2017