The UK’s housing crisis is one of the most pressing challenges facing our communities today. It is not just about supply - it’s about affordability, accessibility, and the growing gap between incomes and rental costs. For key workers - defined in our research as those earning between the lower quartile and median incomes in each Local Authority - the challenge is acute. Often referred to as the “squeezed middle,” these individuals are increasingly priced out of the communities they serve.
With long waiting lists for social housing and rising private rental costs, many key workers are forced to live far from their workplaces, remain at home with parents, or share poor-quality accommodation. This is not just a housing issue - it’s a workforce issue, a wellbeing issue, and a local economic issue.
At Thriving Investments, we not only recognise the critical role institutional capital can play in addressing the UK’s housing crisis but also act on it. We were founded on the belief that housing should be both a financial asset and a social good and have long advocated for place-based investing. The new strategic framework outlined in The Good Economy’s latest White Paper, Scaling-Up Local Investing for Place-based Impact: A Strategic Framework and Guidance for LGPS’, reflects many of the principles we’ve embedded in our own approach. By enabling LGPS funds and pools to unlock over £20 billion for local investment, the framework offers a practical pathway to scale up housing solutions that deliver both financial returns and meaningful community impact.
It provides guidance for how LGPS funds can align fiduciary duty with community outcomes, and it validates the work we’ve been doing for years: using institutional capital to deliver affordable, energy-efficient homes in the places that need them most. This is a pivotal moment for place-based investing. The framework aligns with our mission to deliver high-quality, affordable homes through tenures like Discount Market Rent and Shared Ownership - models that directly cater to the squeezed middle.
Through our strategic funds and partnerships with LGPS investors, Thriving Investments has demonstrated what's possible when institutional capital is aligned with community outcomes. We can evidence how place-based investments can deliver strong financial returns while driving positive outcomes for local communities.
We supported this research because it offers a roadmap for scaling up what we know works. It shows how LGPS funds can invest locally without compromising returns - and how those investments can catalyse regeneration, improve access to services, and promote social inclusion.
Last year, we partnered with PriceHubble to map affordability pressures across 283 UK local authorities. The findings were stark: in many areas, key workers are spending more than the often-cited threshold of 30% - and in some cases up to 80% - of their income on rent. And it’s not just London, cities like Manchester, York, Bath, and Cardiff are among the most unaffordable locations for key worker renting.
This research helped inform the development of our New Avenue Living Greater Manchester Fund, which is designed to deliver energy-efficient homes at discounted rents in areas of acute need. It’s a model that’s already working in Scotland through our New Avenue Living fund, where we have delivered homes at rents between 48% and 71% of market rates.
Our latest new deal with Gresham House Residential Secure Income takes us over 5,000 homes and on track for our ambitious target of 20,000 by 2034.
These milestones reflect our commitment to delivering housing solutions that work - for residents, investors, and local authorities.
Local authorities have a powerful opportunity to attract and retain talent by supporting housing tenures that meet the needs of the squeezed middle. Discount Market Rent and Shared Ownership are proven models that can deliver high-quality, affordable homes close to places of work - helping to build stronger, more resilient communities.
We're proud to support this strategic framework, which provides essential guidance for the sector as it responds to the government's local investing requirements. We look forward to working with pools and administering authorities to scale up this impact across the UK and help more pension schemes unlock the potential of local investment.
The Good Economy’s White Paper provides the strategic framework. At Thriving Investments, we’re delivering the solutions.