Legal & General Retirement Institutional has announced its plans to invest £2bn of pension funds into affordable housing over the next five years
The pension funds investment will help to create more than 10,000 new homes nationwide, and will work towards levelling up the UK through Legal & General’s purpose of inclusive capitalism.
The investment 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 pension funds 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.
According to the National Housing Federation and charity Crisis, 145,000 new affordable homes need to be built every year to meet demand whilst barely a third of that figure, 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, and significantly improving economic growth.
Helping to tackle the shortfall of affordable homes
Andrew Kail, chief executive officer, Legal & General Retirement Institutional commented: “The UK has a huge shortage of affordable homes. Today’s 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, the company made a £100m 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.
The Power of Pensions: Legal & General’s report published in June 2020, found that pension money could be invested into socially useful assets, including housing, creating a circle whereby pension funds drive demonstrable benefits that can help younger generations.
This announcement comes following LGRI’s announcement to target a further £2.5bn of pension money into Build to Rent developments, creating over 7,000 new homes over the next five years.
‘Building new affordable homes and providing housing for those most in need’
Ben Denton, chief executive, Legal & General Affordable Homes also stated: “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.”