Financial services giant Legal & General is to build thousands of affordable new homes. The company aims to become the UK's leading private affordable housing provider and has established Legal & General Affordable Homes to lead the way.
The new affordable homes arm is a subsidiary of Legal & General Capital, the investment arm of the company that focuses on sectors that need investment and innovation.
The first of the 3,000 properties Legal & General Affordable Homes expects to deliver every year should be available within the next four years. The new business will work with housing associations to provide homes across the UK for rent, social rent and shared ownership.
Extra investment required
Nigel Wilson, Legal & General's CEO, said: "Affordable housing is a classic example of under-investment with minimal new equity capital being deployed to the sector.
"This is not a sustainable position, either for the sector or for the 1.3 million households currently on a waiting list. This important sector has now been added to Legal & General's £15 billion UK direct investment programme."
Simon Century, head of Affordable Housing, added: "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."