Private capital is delivering social value through specialised supported housing

At the heart of our new report, Specialised Supported Housing in the UK, is a simple and emotionally resonant reality. This housing changes lives. It allows people to build confidence. It enables social connection. It supports personal development.

According to recent impact data, 63% of residents reported increased confidence and 59% reported strengthened support networks as a result of living in these settings. This is not abstract policy dialogue. This is lived experience.

The social impact extends beyond individual residents. There is a broader societal dividend when vulnerable people are properly housed and supported. Fewer emergency hospital admissions. Reduced isolation. More participation in local work, volunteering and social activity. Better health resilience. And critically, significant cost savings to the public purse.

Specialised supported housing costs less per person than institutional accommodation. Supported living is around £191 per week cheaper than residential care and nearly £2,000 cheaper than long-stay hospital care.

This is before you consider secondary savings arising from reductions in crisis care, reduced demand on the justice system and lower utilisation of emergency services.

“Partnership models [based on private funding] are often misunderstood. Private equity is not displacing state provision”

A single well-managed portfolio of properties for vulnerable adults is estimated to save taxpayers more than £71m a year. These savings are achieved not by cutting support, but by offering support that is tailored, stabilising and community-based. It is both more humane and more efficient.

However, the social value is inseparable from the role of private capital, which has mobilised billions to acquire, refurbish or build these homes. This funding mechanism fills the gap left by constrained public budgets and shortages of traditional housing association capital.

Long-dated private funding provides the upfront investment needed to adapt or develop properties, which are then leased to registered providers who manage them and support tenancies. Public and private sectors each do what they do best. The government funds the rents through housing benefit. Registered providers deliver tenancy management. Care providers deliver support. Private investors supply the capital required for property.

This partnership model is often misunderstood. Private equity is not displacing state provision. It is enabling state provision through targeted investment at a time when public resources for capital development are limited. When done well, it improves choice, quality and availability for residents while allowing local authorities and the NHS to fund support pathways more cost-effectively.

Some earlier models fell short. This has been well-documented. Inadequate oversight of registered providers. Over-reliance on small counterparties. Long, inflexible leases. Lack of portfolio management. These failings damaged trust.

But they were not failures of the concept. They were failures of execution. Today, the most responsible investors treat this sector as operational real estate, not passive rent collection. They share risk more fairly with registered providers. They engage directly in property asset management. They prioritise property quality, governance standards and transparent reporting.

Regulatory reform is also helping raise the bar. The Supported Housing Regulatory Oversight Act 2023 introduced mandatory licensing and national standards. This protects residents, supports responsible providers and gives investors clarity that quality and compliance are enforceable. It also creates a framework where best practice is scalable.

Looking ahead, the opportunity is not just to maintain the current model but to deepen its social purpose. Policymakers should recognise specialised supported housing as essential infrastructure, just like hospitals and schools.

A tiered framework for different levels of support would ensure more residents are matched to the right housing pathway as needs change. Better data infrastructure would allow commissioners and investors to target provision more accurately at local level. Investment in the professionalisation of registered providers would raise delivery consistency.

“Those of us working in this sector know that the financial arguments are strong. But the social arguments are much stronger”

We also must keep talking about the human outcomes. People being able to cook in their own kitchens for the first time. People reconnecting with family. People volunteering in their communities. People moving into employment. People learning to live with their conditions rather than being defined by them.

Those of us working in this sector know that the financial arguments are strong. But the social arguments are much stronger. When the right kind of capital backs the right kind of housing, the effect is transformational.

The UK has an ageing population, rising levels of long-term sickness and more people living with complex lifelong disabilities. This is not a challenge that can be met by public finance alone. Nor should it be.

The private investment model has proven itself to be a tool that can generate aligned public and private benefit. The next phase is scaling what works, supporting those providers and investors who demonstrate genuine commitment to residents, and ensuring specialisation, standards and human outcomes remain at the centre of the story.

Because above all, this is not a story about property. It is a story about people, and about building a system that empowers them to live as fully, freely and independently as possible.

Andrew Teacher, co-founder, Lauder Teacher