Legal & General has secured an additional £150m for its UK affordable housing initiative, increasing its total funding to £280m.
The majority of this new funding, £120m, comes from the Greater Manchester Pension Fund (GMPF), which supports the company’s efforts to expand its portfolio of over 8,000 affordable homes.
GMPF is the largest local government pension scheme fund in the UK, managing more than 375,000 pensions and paying out over £750m annually.
Typically, pension funds have been excluded from such investments due to the higher management costs. However, over the past two years, ministers and regulators have been working to make it easier to invest retirement funds in these assets.
With 1.3m households currently on local authority waiting lists in England, Gerald Cooney, chair of GMPF, said the funding boost comes at a crucial time.
“As a council leader and pension fund chair, I understand the depth of the housing crisis our nation faces,” Cooney stated. “We see it in the record numbers of homeless children in temporary accommodation, growing social housing waiting lists, and younger residents being priced out of home ownership.”
He added, “We are proud to be the cornerstone of this investment with our longstanding partner, Legal & General, and to support the government’s plan to provide much-needed affordable homes for hardworking families while delivering strong, low-risk returns for our members’ pensions.”
Laura Mason, CEO of the private markets and asset management division, said, “Today’s announcement highlights the critical role pension capital can play in investing in tangible assets that benefit the real economy while aiming for positive societal outcomes.”
“With acute demand for affordable housing across the UK and the government prioritizing the delivery of more affordable homes, the public and private sectors must collaborate to drive change, with institutional investment playing a pivotal role.”
She added, “Our evolving partnership with Greater Manchester Pension Fund demonstrates the strength of the platform we have created to leverage Legal & General’s balance sheet capital in investment opportunities for our clients.”
Legal & General launched its affordable housing fund in July, supported by a £125m commitment from the Local Government Pension Scheme (LGPS), ACCESS—a collaboration of 11 administering authorities.
The company plans to work with councils and other providers to address the UK’s housing crisis, aiming to deliver a “diversified inflation-linked cash flow” for investors. Initially, the fund will finance projects totaling 750 new affordable homes across regions from West Sussex to Cornwall, including rental flats at 30 to 50 percent below market rent or available under shared ownership schemes.
Legal & General anticipates raising significantly more capital by year-end to support additional housing initiatives. GMPF’s investment ensures several projects will be located in the north.
Since its launch in 2018, Legal & General has invested £1bn in its affordable homes business, acting as a developer and operator backed by its asset management division. The business now includes 8,000 homes, with more than 5,500 existing and 3,000 in development. Last year, it built 1,304 homes, the highest annual total since its launch, and achieved a pre-tax profit of £1.3m, following a £7.5m loss in 2022.
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By Benjamin
Legal & General has secured an additional £150m for its UK affordable housing initiative, increasing its total funding to £280m.
The majority of this new funding, £120m, comes from the Greater Manchester Pension Fund (GMPF), which supports the company’s efforts to expand its portfolio of over 8,000 affordable homes.
GMPF is the largest local government pension scheme fund in the UK, managing more than 375,000 pensions and paying out over £750m annually.
Typically, pension funds have been excluded from such investments due to the higher management costs. However, over the past two years, ministers and regulators have been working to make it easier to invest retirement funds in these assets.
With 1.3m households currently on local authority waiting lists in England, Gerald Cooney, chair of GMPF, said the funding boost comes at a crucial time.
“As a council leader and pension fund chair, I understand the depth of the housing crisis our nation faces,” Cooney stated. “We see it in the record numbers of homeless children in temporary accommodation, growing social housing waiting lists, and younger residents being priced out of home ownership.”
He added, “We are proud to be the cornerstone of this investment with our longstanding partner, Legal & General, and to support the government’s plan to provide much-needed affordable homes for hardworking families while delivering strong, low-risk returns for our members’ pensions.”
Laura Mason, CEO of the private markets and asset management division, said, “Today’s announcement highlights the critical role pension capital can play in investing in tangible assets that benefit the real economy while aiming for positive societal outcomes.”
“With acute demand for affordable housing across the UK and the government prioritizing the delivery of more affordable homes, the public and private sectors must collaborate to drive change, with institutional investment playing a pivotal role.”
She added, “Our evolving partnership with Greater Manchester Pension Fund demonstrates the strength of the platform we have created to leverage Legal & General’s balance sheet capital in investment opportunities for our clients.”
Legal & General launched its affordable housing fund in July, supported by a £125m commitment from the Local Government Pension Scheme (LGPS), ACCESS—a collaboration of 11 administering authorities.
The company plans to work with councils and other providers to address the UK’s housing crisis, aiming to deliver a “diversified inflation-linked cash flow” for investors. Initially, the fund will finance projects totaling 750 new affordable homes across regions from West Sussex to Cornwall, including rental flats at 30 to 50 percent below market rent or available under shared ownership schemes.
Legal & General anticipates raising significantly more capital by year-end to support additional housing initiatives. GMPF’s investment ensures several projects will be located in the north.
Since its launch in 2018, Legal & General has invested £1bn in its affordable homes business, acting as a developer and operator backed by its asset management division. The business now includes 8,000 homes, with more than 5,500 existing and 3,000 in development. Last year, it built 1,304 homes, the highest annual total since its launch, and achieved a pre-tax profit of £1.3m, following a £7.5m loss in 2022.
Read more: