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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. 

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Ben Denton, managing director of L&G Affordable Housing (picture: Guzelian)
Ben Denton, managing director of L&G Affordable Housing (picture: Guzelian)
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L&G pumps £100m of pension cash into affordable homes business #ukhousing

Pensions giant aiming to build 3,000 affordable homes a year injects more funds #ukhousing

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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