L&G reveals £2bn investment package that will target 10,000 new homes

News20.10.2510.15 AM by Stephen Delahunty

Legal & General (L&G) has announced a £2bn commitment to housing, infrastructure and urban regeneration in the UK.

The asset manager believes the funding will deliver around 10,000 social and affordable homes and create 24,000 jobs (picture: Alamy)

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L&G reveals £2bn investment package that will target 10,000 new homes #UKhousing

As part of this commitment, the asset manager believes the funding will deliver around 10,000 social and affordable homes, create 24,000 jobs, and “support the government’s ambition to unlock economic growth across the UK”.

The government has previously signalled its ambition for regional growth by using investment from pension funds in conjunction with public funding to deliver housing and infrastructure projects at scale.

L&G believes the funding shows its confidence in the UK economy, with the £2bn coming from its balance sheet and co-investment from capital it manages on behalf of other pension scheme clients and master trusts.

The investment programme will enable local and combined authorities to unlock their ambitions to drive economic growth and respond to local needs, such as affordable housing, knowledge economy hubs, infrastructure, retrofitting homes and regeneration.

Funds will be allocated based on local needs and demand, ensuring that every project supports L&G’s dual purpose of delivering both financial returns and positive societal outcomes.

Just last month, L&G’s property fund expanded to £4.7bn following a merger with US-based asset manager Federated Hermes.

António Simões, group chief executive officer at L&G, said: “As a long-term investor in the UK economy, L&G has a proud history of using pension capital to develop assets that deliver strong financial returns and lasting social impact.

“Our £2bn commitment will help unlock the investment needed in productive assets across the country – creating jobs, strengthening communities and driving both regional and national growth.”

Rachel Reeves, chancellor of the exchequer, said: “This is about getting Britain building again – bringing our savings, our investors and our regions together to deliver the homes, infrastructure and industries that will drive growth and create good jobs in every corner of the country.

“Our country’s pension funds are some of the biggest in the world. When they invest in Britain, everyone benefits – from the construction worker on site, to the small business on the high street, to the saver seeing their pension grow.”

L&G has joined Sterling 20, a new partnership of Britain’s largest pension providers, coordinated with government to channel long-term capital into UK infrastructure.

Ms Reeves said: “Sterling 20 shows what can be achieved when we all pull in the same direction to build a stronger economy that works for, and rewards, working people.”

This funding comes ahead of the first-ever Regional Investment Summit in Birmingham, where the Sterling 20 will convene to identify and fund key infrastructure projects across the UK.

Coordinated with the government, the group will leverage over £3trillion in assets to drive growth and prosperity in every region.

TPT Retirement Solutions, which runs the social housing pension scheme, has also joined the initiative.

David Lane, chief executive officer at TPT Retirement Solutions, said: “As part of the group, we will work closely with the government to align our fiduciary obligations with their growth policy agenda, and a key part of this will be identifying investments which benefit pension scheme members while supporting the wider economy and society we all live in.

“The development of a pipeline of such assets is a central element to the Mansion House Accord, and we’re hopeful that by working together the supply of compelling investment propositions – from infrastructure to housing – will continue to grow and deliver tangible positive impacts for people across the UK.”

This latest backing to fund housing and infrastructure comes after council pension funds worth £400bn supported a framework that set out how they can invest in housing and tackling homelessness.