First, all due respect, if you're talking 2% returns and £50k/year for management, then you should recognize your own limitations: your own knowledge of money has its limits, and that is relevant because there are lots of strategies available that are beyond your experience. Of course, that is a very hard thing to hear, because money habits are deeply ingrained psychologically.
How endowments work
The idea of having a lump-sum support your brother is very solid. It's not far from an endowment - which is a funding strategy used by universities and other not-for-dividend entities. An endowment is a pile of money that makes money. The "made money" is reinvested into the endowment (as a hedge against bad years and inflation), and a prudent amount of 4-7% is drawn off to fund projects. The investment strategy closely scrutinized by experts, and must adhere to a reliable standard.
Endowments take advantage of the fact that the scary thing about stock investing is actually volatility, the tendency to go up and down abruptly in the short term. In the long term, markets always go up at a very healthy pace. And that is typical: investments with the highest average growth also have the highest volatility. An endowment manager doesn't care about volatility because she's playing a LONG game. Not only can she be in stocks, she must be by law, because that's where the growth is. Allowing an endowment to rot away in a 2% bond would get her dragged in front of a magistrate.
An endowment is investing for a "some back every year, forever" whilst a trust serves a person with a finite lifespan - so it's not quite the same. It's prudent to start backing out of the volatile stock market as the person gets old enough that the market wouldn't have time to recover from a downturn before the money is needed. Or, the fund could be managed as a "forever fund", and simply assigned to their children.
If you read Pride and Prejudice, and hear about how Mr. Darcy was a "man of 20,000 pounds a year", that's more or less how that worked. The "endowment" wasn't generally traded stocks like today, it was other holdings; but the point is that "endowment" is owned by the family, he inherited it, and he will pass it on to their progeny.
Set up a trust - but it's an arms race
I discussed the endowment so you can have a foundation of what to expect from a trust. Since it serves a financially irresponsible person, the financial engine is similar, but the wrapper must be somewhat different.
First and foremost, it must be protected against squandering. I hardly need to tell you not to give him access to the lump-sum. However, beneficiaries want to spend. They tend to view themselves as the "victim" of a trust, and they really want to bust the trust and get to the underlying lump sum. Discouraging the stupid from busting their trusts, is precisely where the "Fable of the Goose that lays Golden Eggs" came from.
Your brother will likely be actively solicited by winklers (best word I can think of) who will pay a lump-sum to buy the rights to his future trust income. He is then free to squander the lump-sum. This is exactly the fate of many lottery winners who try to protect themselves by selecting a yearly annuity - the linked book was written by a former winkler. Yikes. The trustee is then obliged to make the check out to the winkler, and the brother gets nothing. It's like an anti-endowment that cancels out the endowment, except it's extremely inefficient, with the winkler collecting as much as 85% of the value because they tricked the brother. (thanks CodesInChaos).
For instance, one potential way is for the trustee to have the legal right to suspend or cancel payments at any time. Now, since the payments aren't guaranteed, the winkler won't do business with your brother, because the winkler would know the trustee would stop payments rather than let the winkler have them.
Here's my point.
This area of law is an arms race between lawyers working for trustees and lawyers working for winklers and angry beneficiaries trying to bust the trust. You need to find a lawyer who is very practiced in this particular area, and is "up to speed" on all the strategies used by both sides. This won't be an annual expense (much), but it will be a one-time expense.
Real estate is very tricky
Remember, you have a trust beneficiary who feels cheated by the trust, wants the lump sum, and has unlimited amounts of stupid at his disposal. If you use real estate, that can go wrong a bunch of ways.
If you give him the deed to the house and a stipend to care for it, that stipend will be mismanaged. The $50/month he gets to put into a "roof fund" will be squandered, so when the $20,000 roof is needed, he will be destitute.
He will likely mortgage the house to the greatest extent possible, and again squander the lump sum.
If the trustee manages an emergency fund for such repairs, one of the mechanisms that keeps stupid people broke is that whenever they have money, they suddenly start having emergencies best cured with cubic money. If they were broke and their smartphone breaks, they pay a friend $30 for his old phone. If they have $1000 and their smartphone breaks, that never occurs to them, and they honestly believe their only option was to get a new iPhone X. So his knowledge of the existence of the emergency fund will result in an endless stream of broken appliances etc.
If the trustee is actively managing the trust fund to that degree, then it becomes a battle of wills between brother and trustee, and it becomes very personal. What happens when the brother starts showing up at the trustee's house at 2AM, and the trustee says "enough, get someone else"?
Free things aren't respected. The brother will tend to trash the house, which will be a real problem for the trustee, and will threaten the trust value.
If you must do real estate, it needs to be at arm's length -- probably the best way is to own a large multi-unit building, e.g. 8 apartments, and give the brother reduced rent (so he values it) in an apartment, otherwise a normal rent contract, with normal expectations from the property manager -- except perhaps with the apartment having a right to tap his trust payments for damage. The first time he busts up a door and sees his trust payments drop £100/month, he might stop doing it. Or he harasses other tenants and the property manager handles it like he would any other tenant. Then the brother is free to live there (assuming he doesn't get evicted), or live somewhere else. Because it's a multi-unit building he's paying for, it's not personal.
Financially dumb people don't appreciate free things. But they sure know the value of a rent-controlled apartment.