Back to the future?

All too often, housing stories are full of grim statistics and even grimmer personal accounts of what poor or no housing means to families and communities. In this context, the report that Gary Neville and Ryan Giggs have allowed squatters to use their empty building over the winter is one small glimmer in the darkness.

It prompted me to reflect on the role played by charity in providing homes. Going back to almshouses that began in medieval times, though still playing a role today, to the 5% philanthropists of Victorian times and the burst of activity in the 1960s prompted by the recognition that there were, and are, gaps in the welfare state safety net and too many people fell through those gaps.

Charitable giving and securing grants from charitable foundations is still a critical aspect of building homes and sustaining communities. Now that the state has decided not to provide homes at subsidised rent and to encourage the remaining low cost rent homes to be sold, what are the options for people on low incomes? Who is left to see that there are gaps – gaping holes being made ever wider – in social provision, but then crucially have the means to do something about it?

It is wrong that ensuring every household has a decent home is not a central priority for government; however, there is no way of changing that in the short term. What, beyond random acts of kindness, can be done?

In last weekend’s paper there was a feature on the finance pages, which showed that ethical funds had performed well over the recent period, ahead of many general funds. This was argued to be the product of the closer scrutiny of companies prior to investment in them by ethical fund managers: ‘Over three years, the typical ethical fund is up by around 32%-35% compared with 28% for the FTSE All-Share index and 24% for the AFI Balanced index, which is based on financial adviser fund recommendations.’ (The Guardian, 17 October)

There is a considerable sum, probably over £13bn, invested in ethical funds, green energy bonds or similar products. There is also some evidence that a housing bond targeted on the individual rather than corporate investor would be successful. For example, the Thera Trust with Triodos has launched a retail bond offering 5.5%.

Charitable endeavour is very important and should not be underestimated, especially as a way to change public opinion and ultimately public policy. Equally, to ally this totally altruistic initiative with a well designed and effectively managed investment product could go some way to creating a flow of capital to support housing investment. The advantage that this approach would have is that individual investors could buy and sell their holdings just like other investment products.

Given the current low rates of return on most investments, to make such a product attractive would not require very high rates of return, especially through a tax efficient structure such as an ISA. A combination of charitable giving and prudent investment may well provide the bones of a solution, allied to proven management skills, efficient development and meeting a clear social need.

If government is retreating from providing decent homes for all perhaps we need to go back to Victorian times too in response.