Mencap’s charity bond has reached its £10m target and has closed early due to high demand - the charity is now considering a further bond issue.

In May the first tranche closed early, when it had attracted more than £8m, and Mencap extended the deadline to invest in the second tranche to 28 June.

Funds raised by the bond are being used by Golden Lane Housing, a wholly-owned subsidiary of Mencap, to buy and adapt 30 properties for people with learning disabilities. Investors will receive a fixed yield of 4 per cent per annum for the five-year fixed term.

Triodos Bank worked with Mencap on the bond. Dan Hird, head of corporate finance, said: “This is a great result – not only for Golden Lane Housing but for the UK social investment market generally. It is clear to us that the market is ready for this kind of product.”

Mencap and Triodos launched the bond in February and the bank is planning to launch more charity bonds later this year with other organisations.

Alastair Graham, director of Golden Lane Housing, said: “This bond has been a huge success for us. We have already bought our first four properties using this capital to provide desperately needed homes for people with a learning disability.

“These homes will be a lasting legacy for future generations of people with a learning disability. We’re considering whether further bond issue will allow us to do even more.”