L&G invests £1.75bn into new housing

LEGAL & General has invested £1.75billion in social housing and is looking to add to that as it believes it is a good hedge against an economic downturn.

The investments, pensions and insurance giant has to date lent £1billion to housing associations, who use the money to develop homes.

Additionally, L&G has put £750million of its own money into building housing developments.

The company is keen to invest in social housing as it sees it as a good, defensive long-term investment that fits societal needs.

Social housing generates solid, predictable cash flows regardless of the economic cycle, which matches pension and insurance liabilities.

Additionally, there is a shortage of housing, which guarantees demand.

So far it has been investing its own money in social housing, but Simon Century, L&G’S director for Build to Rent and Affordable Homes, said that bringing on board external investors such as pension funds “was on the agenda”.

He added: “Social housing is an asset class we really like, it has got stable cash flows and fits with our desire for inclusive capitalism.”

L&G believes delivering more homes will not only help boost the economy, but that it will improve people’s health.

Another area of the property market that L&G is looking to make strides in is new-build homes.

The company is producing prefab homes at its factory in Yorkshire and in May, it received planning consent for a development made up of them.