Legal & General invests £2bn in pension funds in affordable housing
Investing in the pension fund will help create more than 10,000 new homes across the country and help improve the UK through Legal & General’s goal of inclusive capitalism.
The investment will help address the severe shortage of affordable housing that currently exists – 1.2 million households are currently on waiting lists for council housing in England.
The pension funds will be used to support the continuing growing demand for housing both at social and affordable rents and to provide a subsidized route to ownership through co-ownership.
According to the National Housing Federation and charity Crisis, 145,000 new affordable homes need to be built each year to meet demand, while barely a third of that number was delivered in 2020/21.
Legal & General and the UCL Institute of Health Equity recently published The Business of Health Equity: The Marmot Review for Industry, which outlines the critical importance of quality housing and infrastructure for health and well-being and for significantly enhancing economic growth.
Help address the lack of affordable housing
Andrew Kail, Chief Executive Officer, Legal & General Retirement Institutional, commented: “There is a severe shortage of affordable housing in the UK. Today’s announcement shows how Legal & General Retirement Institutional will help address some of these issues by placing inclusive capitalism at the heart of its investment focus.
“Legal & General is committed to building a better society for all by investing in useful and sustainable assets that benefit both society today and future generations, while investing hard-earned retirement savings and safeguarding the pensions of thousands of system members .”
In 2020, the company has made a £100m financing commitment for affordable housing. In 2021, a further £270m has been pledged for investment in 1,400 new affordable homes across the UK, to be delivered by 2024.
The Power of Pensions: Legal & General report, published in June 2020, found that pension money could be invested in socially useful assets, including housing, creating a cycle in which pension funds achieve demonstrable benefits that can help younger generations.
This announcement follows LGRI’s announcement that it will invest a further £2.5bn in pension funds in build-to-rent developments, creating over 7,000 new homes over the next five years.
“Build new affordable housing and provide housing for those most in need”
Ben Denton, Chief Executive of Legal & General Affordable Homes, also stated, “This is a great example of Legal & General making a significant difference to the lives of people and their communities by building new affordable homes and providing housing to those most in need.
“We’re also working to maximize the number of low-carbon homes we build, and we’re committed that all new affordable homes we develop will be net carbon-free by 2030.
“There remains a tremendous need to create more affordable housing to help the 1.2 million households on the social housing register.”