The Social Purpose Private Rented Sector (PRS) is proven to provide affordable homes at Local Housing Allowance rates, creating sustainable secure tenancies and preventing more people falling into homelessness. With the right policy change and adequate financial products, this emerging sector could help ease the UK housing crisis.
The Problem: The UK’s deepening housing crisis
The UK is facing a deepening housing crisis. Demand for affordable, safe, and secure homes continues to far outstrip supply especially for low-income households. Social housing is in short supply, with some people facing waiting lists of up to 18 years. At the same time, the PRS is now home to nearly one in five households but is increasingly unaffordable for people reliant on housing benefits. In 2024, local councils spent £2.29 billion on temporary accommodation.
Misunderstandings about the PRS and its landlords often mask the sector’s potential to provide affordable, high-quality housing. Without urgent reform, more people risk falling into homelessness.
The Solution: A Scalable, Socially Driven Model
A Social Purpose PRS is emerging as a practical and mission-led response to the UK’s housing crisis. This model offers good-quality, affordable homes typically rented at or below Local Housing Allowance (LHA) rates. LHA rates reflect the maximum rent support available to low-income tenants based on local housing costs and household size.
These homes are provided by charities, social enterprises, and mission-driven landlords who either own their properties or work in partnership with private landlords. They collaborate closely with local councils and support organisations to house people who are homeless or at risk of homelessness.
While some providers also offer tailored support services, this model is distinct from supported housing or exempt accommodation. Its financial sustainability relies on standard rental income aligned with LHA rates. Working with cross-sector partners we have identified a number of key features:
- Affordability: Rents are set at levels that low-income households can realistically afford.
- Security and Quality: Safe, well-maintained homes with long-term tenancies that promote stability and wellbeing.
- Locally Responsive: Solutions co-designed with local authorities and communities to meet specific housing needs.
- Social Impact: Holistic support services delivered through local partners help tenants build long-term independence and resilience.
The Impact: What the Social Purpose PRS Can Achieve
Mission-led housing providers across the UK and Europe are showing that the PRS can deliver secure, affordable homes at scale.
- Homes for Good (Glasgow): 350+ homes; 90% tenants on benefits; average tenancy 4 years; arrears under 2%.
- Rentstart (Elmbridge): 150 people housed annually at LHA rents with wraparound tenancy support.
- Let Us (Greater Manchester): Consortium of social landlords; 230+ homes managed; 95% tenancy sustainment rate.
- Capital Letters (London): 6,500 homes acquired/refurbished; majority let at LHA rates before announcing closure due to rising rents and limited access to affordable capital.
- Giroscope & Canopy (Hull & Leeds): Giroscope founded 1985; 120 homes in mainly refurbished empty properties; Canopy operating since 1996; 86 homes using tenant self-help renovation model; both provide secure, affordable housing with tenancy support and skills training.
