Octopus Capital has raised £100m for its Affordable Housing Fund that will help Scottish households reduce their rent and energy bills.
The fund invests in new-build developments, with a strong emphasis on social impact, community benefit, and sustainability. This latest funding round includes £50m from the Scottish National Investment Bank.
In a first for the Fund and Scotland, the investment will introduce an intermediate rent tenure where both rent and energy costs will be discounted by around 20% compared to market renting.
All the Bank’s capital will be allocated in Scotland and the homes will also be offered to key workers on a first priority basis.
The remaining capital comes from a US public foundation, reflecting the Fund’s expanding global investor base and growing appeal to mission-aligned institutions.
The funding will 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 a penny for their home energy bill.
Launched in 2022, it is a world-first tariff that lets customers move into homes with green tech – including a heat pump, a battery and solar panels – with no home energy bills for at least 5-10 years.
This fundraise follows the recent news of the Fund participating in the world’s largest Zero Bills scheme in Epping, Essex.
Jack Burnham, head of affordable housing, Octopus Capital, said: “Our aim for this year was to double the size of our Affordable Housing Fund, and we’re so pleased to welcome our new investors into the Fund, enabling us to close in on our next £500m milestone.
“This new capital also presents a few exciting firsts; the investors are from new types of institutions to those in the Fund already, building our growing group of those looking for resilient income and long-term social impact.
“This also 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.”
Nigel Banks, Zero Bills director, Octopus Energy, said: “For too long, people have had to choose between affordability and sustainability. Zero Bills homes remove that trade-off – they’re cheaper to live in, better for the planet, and powered by the latest clean tech.
“This investment into the Octopus Affordable Housing Fund means thousands more people will be able to move into homes where they won’t have to worry about home energy bills. It’s a game-changer for renters and homeowners alike.”
Nicola Douglas, executive director – sustainable investments, Scottish National Investment Bank, said: “The Affordable Housing Fund is a brilliant example of the innovative approaches – to both securing capital and ensuring homes are affordable – that we need to deploy at scale.
“Octopus Capital’s approach to sustainable building and discounting both rent and energy takes a holistic approach to addressing cost-of-living pressures. We were also attracted to the Fund’s approach to regenerating sites, utilising local supply chains, and supporting social inclusion. We are delighted that our investment is helping unlock a further £50m through the Fund for Scotland.”
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