Flagship £2.5m public and private sector deal delivers new homes for refugees in Bristol

The innovative deal has been led by ACH (Ashley Community & Housing), a Bristol-based refugee housing and integration organisation, who has chosen South West place-based impact investor BBRC (Bristol & Bath Regional Capital) as its investment partner.

The deal brings together a total of £2.5m funding and investment to enable the purchase of 12 flats in the city. It comprises £1.1m grant funding from Bristol City Council’s Local Authority Housing Fund (LAHF); £0.4m repayable debt financing from the BBRC-managed City Funds investment fund, which will generate a risk-adjusted return to City Funds investors; and £1.0m capital financing through BBRC from a private endowment fund impact-aligned investor, who will also see a risk-adjusted return.

All 12 properties have now been purchased – four of them directly by ACH and the remaining eight by BBRC. BBRC will lease them to ACH for ten years at a rate significantly below market rate; ACH will purchase the properties before the end of the ten years at a discount to market value. The design of the deal means that ACH will be able to gradually add to its portfolio and acquire all 12 properties, whilst responsibly managing its capital commitments.

The city council will have nomination rights on the flats for ten years, prioritising Ukrainian refugees first and then reverting to the wider waiting list after that.

The first tenants are due to start moving into the mix of one and two bed properties over the next few weeks. The properties all meet the Decent Homes Standard and are being let at affordable rent – 80% of market rate including service fees.

Fuad Mahamed, chief executive of ACH, says: “Our vision is to empower refugees and displaced people arriving in the UK to access everything they need to lead self-sufficient and ambitious lives. One of the biggest barriers is affordable accommodation in the right places. Like so many other cities, Bristol is struggling with a huge lack of affordable housing and growing waiting lists. An established home is key to enabling the people we support to secure employment or start up a business to contribute to our economy.

“We have over 15 years of providing supported housing and integrated support services to give refugees and migrants the tools they need to be able to integrate into our community and feel valued and valuable. This new partnership gives us a unique opportunity to confidently increase ACH’s housing portfolio and test a new investment model that we hope could be expanded to greater numbers of housing in the future.”

Laura Barrow, finance director, BBRC, says: “This is a truly unique scheme that will tackle one of the biggest issues we face in the UK, using public grant funding to unlock private investment, whilst supporting the sustainable growth of a specialist housing provider, and providing risk-adjusted returns to the investors, who will then in turn feel confident to invest in further schemes.

“It’s taken a lot of work to develop and shape the deal, but we are incredibly excited to see it roll out and use it to inform future affordable housing thinking and decision-making.”

Councillor Tom Renhard, Cabinet Member for Housing Delivery and Homelessness, said: “We are delighted to have developed this innovative partnership that helps to increase the city’s housing stock and provide high quality and affordable homes for Ukrainian refugees. It’s a pilot scheme that we hope to be able to build on over time to support significantly more people – it’s one of a number of initiatives we’re taking to continue to tackle the housing crisis in Bristol. This will add to the 12,534 homes built in Bristol since 2016.”