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L&G Affordable Homes boss: ‘We are not bidding up prices on affordable housing’
The boss of one of the country’s largest for-profit social housing providers has insisted that the company is actively not “pushing up prices” when it attempts to secure affordable housing opportunities.
Ben Denton, managing director of Legal & General (L&G) Affordable Homes – the affordable housing arm of the UK’s largest institutional investor – said that the organisation had been “very careful” in ensuring it was not “bidding up prices” when attempting to secure Section 106 and land-led opportunities.
Mr Denton said: “We are really careful that we are making sure we are bidding in market places, but we are not bidding up prices because that is not good for the sector. We probably win just over 10% of what we bid for, which feels about right in not pushing up prices.”
Some social housing providers have told Inside Housing about situations where they have been outbid by for-profit housing associations on certain Section 106 schemes.
Mr Denton said it is a “fair challenge” for L&G to ensure that this does not happen, but he said the organisation has good data to ensure that it bids at levels that would not push up prices.
He said that in the past 10 months, L&G had bid for around 28,000 homes so it has “a good idea” of the prices for affordable property across the country.
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Mr Denton said: “It might happen on individual schemes, but generally we have good visibility on what is happening and in 90% of the cases someone else has paid more than us, and that for me is a good rule of thumb to show we are trying hard to ensure we are not pushing up prices.”
The comments came after the business, which achieved registered provider status in December, announced that it was to invest £750m in affordable housing to help it reach its aim of delivering around 3,000 affordable homes a year by 2022.
Mr Denton said he is “cautiously comfortable” that the organisation is on track to hit that mark, adding that it expects to hand over up to 150 homes this year and a further 1,000 next year.
The L&G Affordable Homes boss, who was previously development director at Sovereign, said that currently 75% of the homes in its pipeline came through Section 106, with the remainder being delivered with support from Homes England through its continuous market engagement funding stream.
Mr Denton said the organisation is looking to boost the amount of land-led delivery it is doing so that it could have a greater balance of delivery methods.
Yesterday L&G announced the appointment of former Capco planning director Anette Simpson, who will be a key part of the businesses plan to increase its land-led delivery output.
In the next few weeks, the association will announce the names of the 14 housing associations that will be management partners on its national framework.
This will see L&G contract out the management of its developments to housing associations on the framework.
Mr Denton said that these associations would largely be medium and smaller-sized associations, due to these organisations being “well plugged into the local community and delivery of great services in local areas”.
