Octopus raises £100m for intermediate rental housing in Scotland

Octopus Capital has raised an additional £100m for its affordable housing fund.

The latest funding round from the asset manager includes £50m from the Scottish National Investment Bank and £50m from an unnamed US public foundation.

It will be used to find an intermediate rental tenure in Scotland where both rent and energy costs are discounted by around 20% compared to market renting. The homes will be offered to key workers on a first priority basis.

Octopus said the funding will also “unlock more than 1,000 zero bills homes across England and Scotland”, offering affordable and intermediate rental properties where residents won’t have to pay for their energy.

Jack Burnham, head of affordable housing, Octopus Capital, said the funding raise means Octopus is “closing in” on its initial £500m milestone for the fund.

He said: “This marks our first time investing specifically into Scotland and its discounted market rent housing. We’re hoping to transform communities there, providing energy-efficient, future-proofed housing to those that need it most.”

The fund has previously raised £118m from three local government pension schemes, £50m from Strathclyde Pension fund, £58m from London CIV and £10m from Avon LGPS, bringing its funds in management to £463m. It has an ambition to grow the fund to £1bn by next year.