Legal & General Retirement Institutional announces its plans to invest a further £2bn of retirement funds into affordable housing over the next five years, creating more than 10,000 new homes nationwide.
The investment, which will be made through Legal & General’s wholly-owned subsidiary, Legal & General Affordable Homes (“LGAH”), will help to address the present housing shortfall in England, where 1.2 million households are on social housing waiting lists. The money will be used to help meet the growing demand for homes, both for social and cheap rent, as well as to provide a subsidised path to ownership through shared ownership.
According to the National Housing Federation and the charity Crisis, 145,000 additional affordable houses are needed per year to meet demand, but only around a third of that number, roughly 45,000, were provided in 2020/21.
The Business of Health Equity: The Marmot Review for Industry, published by Legal & General and the UCL Institute of Health Equity, explains the critical relevance of excellent housing and infrastructure on health and wellbeing, hence considerably enhancing economic growth.
LGRI made its first £100m commitment to affordable housing in 2020. An additional £270m was pledged in 2021 to invest in 1,400 new affordable houses across the UK, with completion expected by 2024.
The Power of Pensions, a paper published by Legal & General in June 2020, suggested that pension funds may be invested in socially useful assets such as housing, creating a virtuous circle in which pension funds drive verifiable benefits that can help younger generations.
This announcement follows LGRI’s declaration that it will invest an additional £2.5bn in Build to Rent schemes over the next five years, resulting in the creation of nearly 7,000 new homes.
Legal & General Retirement Institutional (LGRI) chief executive officer Andrew Kail says: “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.”
Legal & General Affordable Homes chief executive Ben Denton says: “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.”
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