How It Works

After certifying your investor status, completing your documentation and transferring capital, your capital is advanced against an identified asset. You'll receive the underwriting pack for that asset, including expected timelines and projected rent. Monthly distribution statements begin from month 13, and you'll have direct access to Andrew for any questions throughout your investment term.

The typical cycle from capital deployment to first monthly distribution is 13 months, depending on where the project is in its development phase. Construction typically takes 9-18 months, followed by tenant handover and lease signing. Your 12% coupon accrues from the date your capital is drawn and is distributed monthly once rental income commences.

We target undervalued opportunities including derelict buildings, land with planning permission, and HMO conversions in areas with the highest demand for supported housing. Every acquisition must meet strict criteria: strong council demand, viable planning pathway, construction feasibility within budget, and the ability to secure a long-term FRI lease before we break ground.

We focus on residential conversions and new-build developments designed specifically for supported housing. This includes converting disused commercial buildings, HMO conversions, and ground-up developments. All properties are built to meet local authority specifications for supported living, ensuring they qualify for long-term FRI leases with Registered Providers.

No. Your capital is advanced against an identified asset and secured by a first legal charge over that property. You are a secured lender to a specific borrowing company, not a participant in a pooled fund. This is a deliberate structural choice.

External developers typically charge a 15-25% markup on construction costs. By building in-house with our own team led by Matthew Thomson (25 years of construction experience), we eliminate this markup entirely. On a typical £2M project, this creates £300K-500K in instant equity that sits in the asset, beneath the investor's secured loan, rather than being extracted by a middleman.

Matthew Thomson personally oversees every project from foundation to handover. The process follows a clear sequence: site acquisition, planning and design, groundworks, structural build, fit-out to council specifications, compliance certification, and tenant handover. Our in-house team manages contractors, timelines, and budgets directly. There's no intermediary layer adding cost or delays.

Equity is created by the gap between total development cost and the completed property's market value. For example, if we acquire and develop a property for £1.5M total cost and its completed value is £2M, we've created £500K in equity. Building in-house widens this gap because we avoid the developer markup that would otherwise erode it.

Matthew Thomson's 25 years of experience with local authorities and government commissioning gives us an advantage in navigating planning. We have established relationships with councils across England and Wales, and we design developments specifically to meet their supported housing requirements. This alignment means our planning applications are typically well-received because we're building exactly what councils need.

We use fixed-price construction contracts to protect against cost overruns. Our in-house team's deep experience allows us to budget conservatively from the outset. We underwrite projects with contingency built in. If unexpected costs do arise, they're absorbed within the project margin rather than passed on to investors, because Octavian holds the equity and is paid only after the investor coupon and senior debt are serviced.

FRI stands for Full Repairing and Insuring. Under an FRI lease, the tenant, in our case a Registered Provider, is responsible for all maintenance, insurance, and repair costs. This means the property owner keeps virtually all of the rental income as net profit, with no ongoing management burden or unexpected maintenance bills.

Our FRI leases range from 5 to 25 years. Longer leases provide greater income certainty and stability, while shorter leases may offer higher initial yields. The lease length is agreed with the Registered Provider, with the aim of agreeing terms before works complete.

Our tenants are Registered Providers: housing associations and specialist supported-housing providers regulated by the Regulator of Social Housing, not private individuals. Matthew Thomson's 25 years of relationships with councils and NHS commissioning bodies give us direct access to tenants that others can't reach. We aim to agree lease terms before works complete, which reduces but does not remove the risk of completing a building without a tenant.

At lease expiry, properties can be re-let to Registered Providers (demand typically increases over time due to the housing shortage), sold on the open market at full market value, or converted to alternative use. The underlying property retains its value regardless of the lease status, and the structural housing shortage ensures ongoing demand for supported housing.

The intended outcome on every project is a long-term FRI lease with a Registered Provider. If no provider lease is secured, the property is let privately in a high-demand area, which produces a lower yield and reintroduces management cost and void risk. In a more severe case — a build that overruns badly, a valuation that falls short at refinance, or a provider that fails — the asset may not support full repayment of capital at the end of the term. Your security is a legal charge over a real building, which is a meaningful protection, but it is not a guarantee of full recovery. This is a higher-risk investment and you should be prepared to lose some or all of the capital you commit.

Supported housing FRI leases include CPI-linked annual rent escalation clauses. This means rental income on the asset grows each year in line with inflation. The investor coupon is fixed at 12% and does not rise with inflation. Over a 10-year period, CPI-linked supported housing rent overtakes flat commercial FRI rent by Year 3 and continues to compound, generating £89,000 more over the decade.

Supported housing provides accommodation with additional support services for people who need help to live independently, including those with learning disabilities, mental health needs, physical disabilities, or those leaving homelessness. It's a critical part of the UK's social care infrastructure, funded by local councils and regulated under national housing standards.

Standard social housing is general-purpose rental accommodation managed by housing associations. Supported housing includes additional care and support services tailored to residents' needs. This specialist nature commands higher rental rates, longer lease commitments from Registered Providers, and qualifies for specific government funding streams, all of which benefit investors.

The Housing Act 1996 places a statutory obligation on local councils to provide housing for vulnerable populations. This isn't discretionary; councils are legally required to house people who meet certain criteria. This legal mandate creates non-optional, statutory demand for the kind of properties we build.

The UK faces a structural undersupply of approximately 105,000 social housing units per year (145,000 needed, ~40,000 built; source: National Housing Federation / Crisis, Housing Supply Requirements in England, 2024). This gap has persisted for decades and is widening. For investors, this supports sustained demand for the kind of properties we build, although demand for any individual property is not certain. Councils are desperately seeking quality supported housing, and we're building exactly what they need.

Councils are partners, not tenants. They identify housing need and commission and fund the support services for residents, largely through housing benefit and local authority commissioning budgets. The lease, and the maintenance and insurance obligations under it, sit with the Registered Provider. This relationship is built on Matthew Thomson's 25 years of working directly with local authorities and NHS commissioning bodies.

Property is the only asset class that simultaneously delivers reliable income, capital growth, inflation hedging, stability, and leverage potential. Stocks offer growth but with high volatility. Bonds provide fixed income but no growth. Cash is stable but erodes with inflation. Commodities hedge inflation but produce no income. Long-let property on FRI terms combines the best attributes of all asset classes.

On identical gross rent of £100,000: Commercial FRI retains £100,000 (0% costs), Residential buy-to-let retains only £63,000 (37% costs from management, maintenance, insurance, voids), and Octavian's Supported Housing FRI retains £95,000 (5% costs). The combination of long-term FRI leases and zero investor fees maximises net income. These figures are before finance costs. Where a property is funded partly with senior debt, interest is deducted from net rent before any distribution.

Over 10 years, CPI-linked supported housing FRI generates £1,089,000 in net income: £89,000 more than flat commercial FRI (£1,000,000) and £459,000 more than residential buy-to-let (£630,000). The CPI escalation means supported housing rent overtakes commercial by Year 3 and continues to compound, widening the gap every year.

CPI (Consumer Price Index) escalation clauses in our FRI leases mean rental income automatically increases each year in line with inflation, typically 2-4% annually. This widens the margin between the rent an asset produces and the fixed coupon it services, and creates a compounding effect. The investor coupon itself is fixed at 12% and does not rise with inflation. Over a 10-year lease, a 3% annual escalation increases rent by approximately 34% compared to a flat lease.

The UK offers a unique combination of factors not available in other markets: a severe, legally-mandated housing shortage (Housing Act 1996), mature and transparent property market with strong rule of law, established FRI lease structures that shift costs to tenants, and a regulated Registered Provider sector underpinned by statutory local authority duties. Combined with our in-house construction capability, this creates an investment opportunity that can't be replicated elsewhere.