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Capital Letters: homelessness organisation to close
Why the London non-profit – which has helped 17,000 people into a safe and secure home – has announced it will shut down by the end of the year
STRATEGY
Sue Edmonds
CEO, Capital Letters
Sue Edmonds
CEO, Capital Letters
Issue 79 | September 2025
Capital Letters was unique; a bold and brave response to homelessness in London, driven by a desire to do things differently and better. It embodied author and leadership expert Jim Collins’ ‘Big Hairy Audacious Goal’ in organisational form.
Aspirational, visionary and innovative, Capital Letters was created in response to the Homelessness Reduction Act 2018, which expanded local authorities’ responsibilities and costs.
Ministry of Housing Communities and Local Government grant was an investment in the possibility of change: to change the way things were done, disrupt the market, to achieve something different.
Nothing like it had been tried before, and it worked. Yet, factors beyond our control mean a long-term sustainable future is out of reach.
“The vision was to create a pan-London membership organisation to procure homes for all boroughs.”
The vision
At the heart of our work lay the pinch point between families presenting as homeless and the lack of homes to move into. Boroughs were overstretched, competing for private sector properties at Local Housing Allowance (LHA) rates, with rising costs from landlord incentives and extended stays in temporary accommodation (averaging five years), while quality declined in the desperate search for ‘suitable’ homes.
The vision was to create a pan-London membership organisation to procure homes for all boroughs, share them fairly, end cross-borough competition, standardise incentives, prioritise in-borough placements, set a Decent Homes Standard+ for properties, and support tenants and landlords to sustain tenancies. Centralised procurement would be key to stopping landlords from playing boroughs off against each other.
Proud legacy
Capital Letters procured nearly 7,000 family homes, helping at least 17,000 Londoners move from temporary accommodation into affordable, safe, secure, good-quality housing. Each family received a two-year tenancy and free tenancy sustainment support (as did landlords) from our team – the jewel in our crown, helping avoid the revolving door of homelessness. We achieved a 97% tenancy retention rate and 61% in-borough placements, compared to the London average of 41%.
We were designed to be a thought leader in the homelessness sector, raising issues, changing narratives, and influencing policy. From joint research and All-Party Parliamentary Group inquiries into commercial-to-residential conversions, to campaigning for increased LHA rates and better use of empty homes, our voice was heard.
From the start, Capital Letters was agile and responsive to members’ changing needs. We focused on securing independent income to replace time-limited grant funding and building our housing management credentials. As a Teckal company, we quickly mobilised to manage a block of substandard homes under an Interim Management Order issued by a member, something that wouldn’t have been possible without us.
family homes procured, helping at least 17,000 Londoners move from temporary accommodation into affordable, safe and secure housing
tenancy retention rate achieved and 61% in-borough placements, compared to the London average of 41%
So why are we closing?
The world has shifted dramatically since our inception. The pandemic transformed London’s rental market, compounded by rising homelessness, rent hikes, frozen LHA rates, and the two-child benefit cap. With just 5% of properties now at LHA rates (Savills, October 2024), our founding premise became undeliverable.
The Kwarteng/Truss budget made borrowing more expensive, the US election worsened it, boroughs couldn’t guarantee loans, and we were set up as a non-asset holding entity unable to raise money and investment in our own right to purchase properties. Projects to secure post-grant income simply wouldn’t work.
Environmental Social and Government (ESG) investors loved our mission, but not the margins or risk. The Greater London Authority (GLA) supported us, but we weren’t a Registered Provider or a local authority – despite being owned by 10 of them – so we were unable to access grant funding.
Our successes were often overshadowed by an initial business plan written before we had a single employee. Optimism underpinned it: optimism that 100 staff would be seconded, that boroughs would transfer Private Sector Leasehold (PSL) portfolios to Capital Letters, and that the market would remain stable.
Secondments proved difficult, landlords exited the Private Rental Sector (PRS) and PSL markets, and becoming a landlord without assets or collateral was unworkable. The original business plan targets became a millstone, ignoring reality and casting a shadow over our achievements.
Hindsight is a wonderful thing: yes, had Capital Letters been set up differently at the start, maybe the outcome could have been different. However, there would still have been a pandemic and seismic market changes which may still have confounded our plans.
We helped 17,000 Londoners into safe, secure homes, saving boroughs more than £200 million. We created a collaborative partnership that worked while the market was stable, reshaped thinking at a national level, and left a proud legacy.
That feels like success to us.
“The original business plan targets became a millstone, ignoring reality and casting a shadow over our achievements.”
