Mortgages  

Nick Clegg calls for more housebuilding

“Our homes are where we grow up, raise our families and grow old, and it is vital that Britain continues to build vibrant communities where people can live, work and participate in a stronger economy and a fairer society,” said the deputy prime minister.

Mr Clegg’s comments came as Legal & General announced it had purchased a portfolio of more than 4000 housing units for a total consideration of £252m, which it has let to Places for People Homes on a new 50-year lease.

L&G has invested £5.2bn in UK infrastructure projects to date and is one of the six UK insurers committed to investing £25bn in the UK by 2018.

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Places for People Homes plans to build 7000 new housing units in the next seven years, including affordable, private-rented and owner-occupier accommodation.

Paul Stanworth, managing director of Legal & General Capital, said: “At the end of 2013 we had £2.9bn of direct investments in UK infrastructure. Since the insurance action plan was announced three months ago we have made further direct investments of over half a billion pounds, including in social and key worker housing and student accommodation.”

Mr Stanworth added that L&G was developing potential initiatives in the private rental sector and expected to extend its private placement lending business to small and medium-sized enterprises.

The investment, by L&G Retirement and managed by Legal & General Capital, is part of L&G’s strategy to increase funds allocated to direct investments and infrastructure in a bid to match the firm’s long-term annuity and pension liabilities.

Background

The deal follows L&G’s recent announcement that it had agreed a £40m 25-year debt facility to Thames Valley Housing Association, enabling it to build more than 500 new units of affordable housing.

Adviser view

Jonathan Harris, director of London-based Anderson Harris, said: “There is a desperate demand for housing so an extra 7,000 units built over seven years will be extremely welcome. With the government announcing at the weekend that a new garden city is to be created with 15,000 homes at Ebbsfleet, Kent, it is encouraging to see efforts being made by the private as well as the public sector to attempt to solve the housing problem.”