Could Private Investments Solve the Affordable Housing Crisis?

It is no secret that the UK is currently in the midst of an escalating housing crisis. Lack of affordable housing has resulted in millions facing the prospect of renting for life. Something which, in the face of skyrocketing monthly rent prices, paints the picture of a foreboding financial future for the masses.

All government initiatives to date have fallen short of spurring the turnaround needed to solve the affordable housing crisis. Nowhere near enough new homes are being built each year to cope with demand, and the disparity is predicted to continue growing indefinitely.

Nevertheless, there are some who believe that the private investment sector could hold the key to solving the affordable housing crisis. They argue that there are numerous potential benefits to involvement in affordable housing initiatives, which private investors should actively consider.

Examples of which include the following:

1. The Potential for Generous Returns

Firstly, the fact that there is such insatiable demand for affordable housing means healthy returns are all but guaranteed. The combination of severely low supply of inventory and huge demand has created a market where newly-built affordable homes are being snapped up instantaneously. Bids are being placed without prospective buyers ever having visited the property in question, and overnight queues outside estate agents for limited available plots have become the norm.

Safe havens for investors are not easy to come by, but there are few sectors with greater potential right now than real estate. At least, in terms of the growing disparity between available inventory and demand, creating a market bursting with potential opportunities.

2. The Opportunity to Make a Meaningful Social Impact

Affordable housing provides people with the opportunity to get involved in a sector that not only opens the door to generous returns, but also contributes to social change in communities across the country. Return on best investments may be the primary point of appeal, but investments that make a positive impact socially are becoming a firm priority for the forward thinking investor.

This has become a segment of the market that many investors – millennials in particular – have been gravitating towards for some time. Investors looking to present themselves as conscientious and concerned with the communities in which they operate have the opportunity to do just that.

3. The Possibility of Affordable Diversification

Lastly, the real estate sector provides investors with the surprisingly affordable opportunity to diversify their portfolio. Particularly when it comes to entry-points like crowd funding and property bonds, it’s possible to buy into the housing sector in the UK with the bare minimum capital.

This is again something that is proving particularly attractive for newly established investors and younger demographics. Capital can be spread across any number of property investment opportunities with a diverse range of products, enabling the investor to tailor their strategies in accordance with their budgets and risk appetites.

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