L&G raises over £750m and bolsters its deployment into new affordable housing

• The Fund has achieved sustained momentum in deploying capital, with 1,111 homes across 35 assets completed with customers moved in and a further 1,285 under construction, bringing L&G’s total portfolio of affordable homes to over 9,000. The Fund’s activity has delivered its target returns to investors in its first year.
• The fundraise demonstrates the continued growth of L&G’s private markets platform and strong client demand for the affordable housing asset class, combining the potential for attractive index-linked returns with positive societal impact.

Legal & General today announced that it has raised over £750m for its affordable housing investment strategy of its Affordable Housing Fund (“the Fund”), aimed at delivering new affordable housing across England.

New investors include LPPI, one of the UK’s Local Government Pension Scheme (LGPS) investment pools, with an investment of £50m. In addition, L&G’s Private Markets Access Fund, which provides L&G’s 5.7 million Defined Contribution members with the ability to access a diversified range of investment opportunities, has completed an investment into the fund.

These commitments build on previous investments from a range of institutional investors including, local government pension, insurance, UK defined contribution and charity/endowment clients. 

The Fund has made strong progress in deploying capital into new high-quality affordable homes, with two- thirds of investments committed across 1,111 stabilised homes and 1,285 under-construction homes, with a strong pipeline for the remaining capital.  Assets include properties in London, Dorset, Cheshire, Gloucestershire, Norfolk and Leicestershire, with an ambition for the Fund to deliver over 5,000 homes by 2030*. The Fund is making a significant social impact with the average L&G home at 60% of open market rent. With 11% of customers coming from homelessness, the Fund’s progress shows the difference it is making to customers’ lives. The Fund also recently completed its first net-zero development in Essex. 

Investments to date include the 311-home Colindale scheme in Barnet, North London, comprising of social rented homes. This development, acquired by the Fund from Barratt Homes, represents the largest single social rented grant-funded affordable housing scheme delivered in London in the past 12 months, in an area of acute need, is estimated to house over 500 children and helping many out of temporary accommodation. 

With severe supply shortfalls in affordable housing across the UK, this additional capital demonstrates both the strong client demand for the asset class and the positive impact of the public and private sector coming together to build much-needed homes. 

The Fund’s assets are developed and operated by L&G Affordable Homes, benefitting from a sector-leading platform in origination and management of affordable housing. With over £1bn invested in affordable housing since the business was established in 2018, L&G Affordable Homes has an established track record of delivery within the sector.