The UK insurer Legal & General has teamed up with 14 housing associations to build 3,000 affordable homes annually, as official figures show a 22% rise in the number of affordable homes delivered in England in the past year.
The insurance and pensions firm set up an affordable housing business in April 2018 and has built up a pipeline of 3,500 homes to be constructed across the UK over several years, backed by a £750m investment. Just over half of them will be shared ownership and the rest affordable or social rent.
It aims to achieve its 3,000-a-year target across the UK by 2022. It has become a key player in the housebuilding sector in recent years, particularly in build-to-rent, as renting becomes more common.
So far the firm has completed two affordable housing projects. Residents have started to move into one- and two-bedroom apartments at Leon House in Croydon, a former office building, and into two- and four-bedroom houses in Falmouth in Cornwall. About 60% of them are shared ownership – prices for 25% shared ownership at Leon House start at £76,250 – and the rest are affordable rents.
Stonewater, a not-for-profit social housing provider, will be L&G’s largest management partner among the 14 housing groups, which also include Pinnacle, Great Places, Accord and Optivo. Stonewater is to take over the management of 1,000 homes built by L&G in the coming months in Worcestershire, Warwickshire, Leicestershire, Hertfordshire and Central Bedfordshire.
Ben Denton, who runs L&G’s affordable homes division, said: “We are bringing much-needed pension fund capital into the housing sector. There is an urgent need to keep innovating in this sector and to provide quality, stable homes for the 1.1m households on waiting lists in England.”
One in three low income earners have had to borrow money to pay their rent and the steep decline in social housing had led to huge increases in government welfare costs, as well as rising homelessness, L&G said.
New figures from the Ministry of Housing, Communities and Local Government showed 57,485 affordable homes were delivered in England in 2018-19, up 22% from the year before, the vast majority new-builds.
The proportion of rental homes (including social, affordable and subsidised rent) has declined steadily, to two-thirds from 78% in 2014-15. Just 6,287 homes were built for social rent last year, mostly by housing associations, down from 6,679 in the previous year. The numbers have fallen sharply from more than 37,000 in 2010-11.
However, at least 3m new social homes are needed in the next 20 years – more than were built in the two decades after the end of the second world war – according to a report by a cross-party housing commission in January.
One way of speeding up housebuilding is to manufacture homes in factories. L&G opened a modular housing factory in Leeds two years ago to ramp up housebuilding.
The plant turns out hundreds of prefab houses and flats a year and delivers them as finished “turn-key” homes on site within one to two weeks, depending on the size.
