Octopus lands Big Society Capital funding for United Kingdom affordable dwelling projects
In a significant move towards addressing the UK's chronic shortage of social and affordable housing, Octopus Investments, a UK-based investment manager, has secured an additional £10 million for its Affordable Housing Fund from social impact investor Big Society Capital (BSC).
This latest investment brings the total capital raised by the fund to over £360 million as of July 2025. The fund has also received contributions from UK local government pension schemes, including Strathclyde, London CIV, and Avon, amounting to £118 million. The fund remains open for new commitments, with a target of reaching £1 billion in investment by 2026.
The Affordable Housing Fund supports the delivery of well-built, affordable homes through NewArch Homes, a for-profit provider in the social rented, affordable rented, and shared ownership sectors. With around 500 affordable homes under its ownership, NewArch Homes is now one of the ten largest for-profit registered providers of social housing in the UK, demonstrating Octopus's ability to deploy capital effectively and at pace.
The homes funded by the Affordable Housing Fund are being built in areas of high housing need, where the provision of new affordable housing over the last four years has been less than 50% of what was required. The first deployment of the fund has been made through forward funding, committing to acquire 26 homes near Peterborough in eastern England from Vistry Homes. All these homes are expected to be ready by April 2025.
The growth of Octopus Investments' affordable housing investment market is a testament to the strong demand from investors. Impact-driven private capital, such as that provided by BSC, plays a vital role in addressing the UK's housing shortage.
Meanwhile, real estate investors are increasingly paying attention to social and environmental considerations, partly due to stakeholder pressure and tighter ESG-related requirements in Europe and elsewhere. BSC, a key player in the UK social investment market, is funded from dormant UK bank accounts and the UK banks Barclays, HSBC, Lloyds, and NatWest.
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[1] Octopus Real Estate (October 2023). Affordable housing: Development pipeline under threat. Retrieved from [link] [4] Octopus Investments (July 2025). Octopus Investments' Affordable Housing Fund raises over £360 million. Retrieved from [link]
- The Affordable Housing Fund, managed by Octopus Investments, has secured an additional £10 million from the social impact investor Big Society Capital (BSC), bringing the total capital raised to over £360 million as of July 2025.
- The Affordable Housing Fund is open for new commitments, with a target of reaching £1 billion in investment by 2026.
- Impact-driven private capital, such as that provided by BSC, plays a vital role in addressing the UK's housing shortage, and the growth of Octopus Investments' affordable housing investment market demonstrates the strong demand from investors.
- Real estate investors are increasingly focusing on social and environmental considerations, partly due to stakeholder pressure and tighter ESG-related requirements in Europe and elsewhere, and BSC, a key player in the UK social investment market, is funded from dormant UK bank accounts, including those from Barclays, HSBC, Lloyds, and NatWest.
