L&G launches affordable housing arm

Legal & General has launched L&G Affordable Homes, a new wholly owned affordable housing provider. The new company will be a subsidiary of L&G Capital and will have both development and management platforms, adding to its housebuilding and PRS arms. L&G chief executive Nigel Wilson said: “Affordable housing is a classic example of underinvestment, with minimal new equity capital being deployed to the sector. “This is not a sustainable position – either for the sector or the 1.3m households currently on a waiting list. “This important sector has now been added to Legal & General’s £15bn UK direct investment programme.” L&G said it wants the company to be the leading private affordable housing provider in the UK, becoming fully operational and delivering 3,000 homes per year within the next four years. It will target all areas of the affordable housing market, including new-build Section 106 and grant-funded affordable rent, social rent and shared-ownership units. Simon Century, who will head up the new affordable arm, said: “Many housing associations are becoming increasingly highly leveraged as they have funded significant amounts of development through debt funding for many years. “They have no ability to raise equity and maintain a sustainable financial structure, therefore forcing many to significantly limit their growth ambitions. “Legal & General Capital is building a more natural and sustainable model – one in which institutional investors are the long-term holders of the assets working alongside the best-in-class affordable housing operators who will provide the highest-quality housing management.” To send feedback, e-mail alex.peace@egi.co.uk or tweet @egalexpeace or @estatesgazette