‘Property with purpose’: expansion plans for social housing investment group.

A social impact housing developer has pledged to create a thousand beds for vulnerable people after forging a new partnership with specialist property lender Together.

Vital Homes Group, launched by co-founders Elena Pashevkina and James Levy after the global pandemic in 2022, has within its first year of trading, built up a £6.5million portfolio of accommodation across the UK, run by local councils, registered social housing providers (RPs) and charities.

The group provides homes such as self-contained flats and Homes in Multiple Occupation (HMOs) in London and the North West for vulnerable tenants such as victims of sex trafficking and domestic violence, and people with disabilities as well as prison leavers.

The business has long-term plans to expand, and has agreed a loan facility with Together to help house 1,000 in their first five years. It has already benefited from £5million of funding from the Manchester-based finance provider, which has seen five properties transformed into supported accommodation.

James, Chief Executive Officer at London-based Vital Homes Group, said: “The plans are to continue to diversify our housing partners. We have three or four core partners and want to develop this to six or seven, depending on the financial viability and quality of services being provided and the number of people that need housing. We’d then look to acquire a Register Provider ourselves and offer affordable housing,

“We are looking to create a diversified portfolio of hundreds of high-standard eco-friendly properties across the UK, to provide 1,000 beds for society’s most vulnerable people.”

Coming from a background in corporate finance and having recently exited a business venture as one of its executive directors after its sale to a listed corporate, James teamed up with successful retail expert Elena to create Vital Homes Group directly after the Covid lockdowns ended.

Elena, Chief Operating Officer at Vital Homes Group, said: “I come from a sales background, which is completely different from James, and had been building up a business with my sister for ten years. However, James and I wanted to do something in property which is meaningful and impactful.

“We were looking at different business models and strategies, trying to identify a private capital model that satisfied the Regulator of Social Housings’ concerns, which didn’t exist. We sat down and brainstormed ideas trying to find a business model that was sustainability profitable for us while supporting the needs of others. Now, I identify the opportunities and connect with our housing partners and others we work with and James focuses on growth, corporate strategy and organising our multiple lines of funding.”

Their housing development company is “demand-driven”, said Elena, with local authorities and charities identifying areas where there is a need for supported housing. Vital Homes then sources suitable properties – usually large family homes – and uses their team of architects and tradesmen to carry out renovations , creating the homes needed.

“We are providing high-quality sustainable accommodation to last for 40 to 50 years,” said James. “They have excellent kitchens and bathrooms and other facilities. We take every single house back to brick and everything that’s replaced is eco-friendly, so that we ensure an EPC energy efficiency rating of C at minimum.”

Initially, Vital Homes struggled to find financial backers who understood the supported housing sector , despite approaching about 50 lenders, including high street and challenger banks.

James said: “There is a huge issue with a lack of understanding or lack of appetite to pursue this type of lending and, even if they did understand the sector, there were often problems that made it hard for them to fund deals.

“I spent four months trying to find a lender capable and willing to underwrite and to be able to have the conversation with Together was crucial to the growth of our business .”

Manchester-based Together launched its social housing channel in 2022, with its finance supporting the development of almost 1,000 affordable homes for over 5,000 tenants such as key workers, formerly homeless people, elderly care home residents, disadvantaged children and adults with additional needs.

Alex Bodie, Director of Corporate and Community Housing at Together, said: “We were really impressed when we saw Vital Homes’ business model and are delighted to support as the finance partner for their growing business. They have a mission to provide high-quality and eco-friendly supported living social housing and provide safe and affordable accommodation for their tenants.

“The demands and requirements of councils, Registered Providers and charities inform all aspects of the Vital Homes business model, including sourcing and acquisitions, planning and development.

“Through these relationships, Vital Homes directs its capital to the place where it is most needed and where it can make a real difference whilst realising risk-adjusted returns on its capital employed.”