UK Pension Funds Invest Additional £118 Million into Octopus's Affordable Housing Investment Fund
In a bid to address the chronic shortage of social and affordable housing in the UK, Octopus Capital's Affordable Housing Fund has set an ambitious target to raise £1 billion by 2026. As of mid-2025, the fund has already raised over £360 million, including a recent £118 million injection from UK local government pension schemes like Strathclyde, London CIV, and Avon LGPS.
The fund primarily deploys capital through NewArch Homes, Octopus’s for-profit registered provider of social and affordable housing. NewArch Homes now owns 500 affordable homes, making it one of the ten largest providers of social housing in the UK. The fund aims to fund the construction and retrofit of approximately 5,000 affordable family and older persons’ homes in multiple UK regions.
The focus of the fund is on social rented, affordable rented, and shared ownership homes, excluding specialist supported housing. Committed to ESG standards, the fund adopts the Sustainability Reporting Standard for Social Housing (SRS) to ensure robust sustainability practices.
The UK government has shown its support for this initiative, committing £39 billion to the affordable housing sector over the next decade through its new Social and Affordable Homes Programme. This funding, along with the private investment from the Affordable Housing Fund, provides a significant boost towards meeting the government's target of delivering around 300,000 social and affordable homes.
Recent developments include Octopus Capital's acquisition of 220 homes via a partnership with CHP, a housing association based in Essex, to help address shortages in the county. Additionally, Octopus Capital has appointed Ellie Vlavianou, previously at housing association and developer L&Q, as executive director of its affordable housing fund team.
The recruitment of experienced housing practitioners and investment professionals, such as Ellie Vlavianou, has been seen as a positive move by investors like London CIV. Christopher Osborne, head of real estate at London CIV, believes the fund's team has been bolstered by these recruitments. London CIV's new investment brings its total commitment to the fund to £108m.
The progress and scale of the Octopus Capital's Affordable Housing Fund illustrate a significant effort to help fill the affordable housing gap in the UK. The fund's commitment to ESG standards, focus on social rented, affordable rented, and shared ownership homes, and adoption of the SRS reporting framework align with government commitments, providing supportive policy and investment certainty for the future of affordable housing in the UK.
- The Octopus Capital's Affordable Housing Fund's commitment to raising £1 billion by 2026 is aimed at funding the construction and retrofit of approximately 5,000 affordable family and older persons’ homes, which plays a significant role in the UK's energy transition, as these homes will be built with a focus on sustainability, adopting the Sustainability Reporting Standard for Social Housing (SRS).
- In addition to the Affordable Housing Fund's crucial role in addressing the shortage of social and affordable housing in the UK, it also demonstrates a commitment to development finance, as the fund has already secured over £360 million in mid-2025, including investments from UK local government pension schemes like Strathclyde, London CIV, and Avon LGPS.
- The recruitment of experienced professionals like Ellie Vlavianou, who has worked with housing association and developer L&Q, not only strengthens the Octopus Capital's Affordable Housing Fund team but also has a broader social impact, as her expertise in the affordable housing sector can contribute to the achievement of the government's goal of delivering around 300,000 social and affordable homes, providing affordable housing solutions for a wide range of people, including those involved in sports, who may need housing solutions due to their long travels or training schedules.
