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L&G pumps £100m of pension cash into affordable homes arm
Legal & General (L&G) has revealed it is using pension money to give its affordable housing business a £100m boost.
The pensions and insurance giant has lent the money to the division, as part of long-term debt financing, as it works on a current pipeline of 3,500 homes.
The organisation also revealed that an extra £175m is being provided to the division by a “consortium of external investors” to help build its current pipeline of homes.
L&G launched its affordable housing business, including setting up a for-profit housing association L&G Affordable Homes, in 2018 with an initial £750m investment.
It originally aimed to deliver 3,000 homes a year by 2022, but last year the target date was changed to 2023.
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The business is planning to deliver a mix of social rent, affordable rent and shared ownership homes.
Commenting on the pension investment into its affordable housing arm, L&G said it was an appropriate asset for its Pension Risk Transfer business to invest in, with affordable housing offering a secure portfolio of inflation-linked rental income which delivers long-term, diversified, stable returns.
Nigel Wilson, chief executive of L&G, said: “Legal & General’s continued activity in the affordable housing sector demonstrates our unique ability to create real assets which match our long-term pension liabilities, recycling the UK’s hard-earned savings and pensions to support those most in need in society.”
In November L&G announced a tie-up with 14 housing associations, which it will use to manage homes owned by its for-profit social housing provider.
RHP, Optivo, Jigsaw, Flagship Homes, Karbon Homes, Great Places Housing Group, CHP, Accord, Stonewater, Regenda, Saxon Weald, Coastline Housing, and Raven Housing Trust were all selected, as well as private company Pinnacle Group.
L&G is also aiming to disrupt the housebuilding market with its modular business, which is targeting 3,000 factory-built homes a year. However, the venture has so far racked up cumulative losses of around £76m.
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Inside Housing Development Summit 2020
Inside Housing is pleased to join forces with Homes England and the LGA to introduce the Inside Housing Development Summit.
Taking place on 27-28 April 2020, the summit will gather together local authorities, housing associations, developers, fund managers and advisors for a Chatham House style event focussed on making new connections and exploring new delivery models.
The summit will take place over 28 hours, starting with an afternoon plenary on 27 April, an exclusive development site study tour to Northstowe, England's largest new town since Milton Keynes, followed by a business dinner.
The second day will provide opportunities to network with a range of senior Homes England and LGA staff including Nick Walkley, chief executive of Homes England and Mark Lloyd, chief executive of LGA.
You’ll also meet with leaders from across the development ecosystem and take part in group discussions to help you connect and explore new opportunities. All accommodation and meals will be provided within the fee.
Places for each stakeholder group are limited to ensure a balanced mix of participants and to make sure you leave with the relationships and leads you need.
Click here to book your place or for more information
