The investment, through Legal & General’s wholly owned subsidiary, Legal & General Affordable Homes (“LGAH”), will help to tackle the huge shortage of affordable housing that currently exists – 1.2 million households are currently on social housing waiting lists in England. The funding will be used to support further growing demand for homes both for social and affordable rent as well as providing a subsidised route to ownership through shared ownership.
The National Housing Federation and charity Crisis estimate that 145,000 new affordable homes need to be built every year to meet demand whilst barely a third of that figure, c.45,000 homes, were delivered in 2020/21.
Legal & General and the UCL Institute of Health Equity recently launched The Business of Health Equity: The Marmot Review for Industry, that outlines the vital importance of quality housing and infrastructure on health and wellbeing, thereby significantly improving economic growth.
Andrew Kail, Chief Executive Officer, Legal & General Retirement Institutional (LGRI): “The UK has a huge shortage of affordable homes. The announcement demonstrates how Legal & General Retirement Institutional, by putting inclusive capitalism at the centre of its investment focus, will help to address some of this problem.
“Legal & General is committed to building a better society for all by investing in useful and sustainable assets that will benefit both today’s society and future generations, whilst investing hard earned pension savings and securing the pensions of thousands of scheme members.”
In 2020 LGRI made a first £100 million funding commitment to affordable homes. In 2021, a further £270 million was committed to invest into 1,400 new affordable homes across the UK, to be delivered by 2024.
Legal & General’s report, ‘The Power of Pensions’, published in June 2020, found that pension money could be invested into socially useful assets, including housing, creating a virtuous circle whereby pension funds drive demonstrable benefits that can help younger generations.
This announcement comes following LGRI’s announcement to target a further £2.5 billion of pension money into Build to Rent developments, creating over 7,000 new homes over the next five years.
Ben Denton, Chief Executive, Legal & General Affordable Homes: “ This is a great example of how Legal & General is making a significant difference to people’s lives and their communities by building new affordable homes and providing housing for those most in need. We are also working to maximise the number of low carbon homes we build and we have committed that all new affordable homes we develop will be Net Zero Carbon by 2030.
“There is still a massive need to deliver more affordable housing to help the 1.2 million households on the social housing register.”
LGAH recently published an affordable housing whitepaper in partnership with the British Property Federation (“BPF”), which found that 145,000 more homes are needed every year to plug England’s affordable housing gap. This will require an estimated additional funding of around £34 billion. The whitepaper calls for the Government, housing associations and institutional investors to enable increased delivery.
All Legal & General’s affordable homes are created to a high standard and strive to meet best in class affordable homes – which are assessed against multiple quality criteria, including accessibility and sustainability – and are set to target net-zero carbon by 2030 by introducing air-source and ground source heat pumps.
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