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Legal & General Aims to Make 3,000 affordable Homes Available Per Year

Prominent Legal & General is initiating an affordable homes business with the goal of delivering 3,000 new homes a year within four years.

Legal & General said that it was presently hiring a management team to operate the new division, which is expected to construct and purchase homes to combat an ongoing shortfall of affordable homes.

Nigel Wilson, chief executive of L&G, said that affordable housing was a prime example of underinvestment with low amounts of new equity capital being made available to the sector.

He warned that this position was not sustainable, either for the sector itself or the million-plus household on the current waiting list.

The affordable homes division is L&G’s most recent move into the British housing market, where it is becoming a key presence. The firm is already investing nearly £1.5bn in build-to-rent opportunities, with locations in Bath, Brighton, Bristol, Leeds, Salford, Walthamstow and Edinburgh.Its goal is to have 6,000 build-to-rent properties in planning, development, or operation by the end of next year.

Legal & General has also pledged to transform the UK housebuilding industry by building thousands of prefab homes at its new factory in LEEDS. The homes are put together and fitted out in the factory before being loaded on the back of trucks and being transported to their intended locations.

 

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The new business dedicated to affordable housing will be a subsidiary of Legal & General Capital, which concentrates on opportunities where innovation and investment have been lacking.

L&G indicated that it would take a more sustainable approach to delivering affordable housing after housing associations have accumulated a lot of debt to finance developments over the years.

The Prime Minister has called the national housing crisis one of the greatest barriers to social mobility in the UK, with 300,000 new homes needed each year to tackle the shortage. She stated that key workers such as firefighters, nurses, and teachers should be priority tenants or purchasers of affordable homes.

The UK homes shortage has helped maintain house prices in recent months despite reduced consumer spending and a more sluggish economy.

According to the mortgage lender Nationwide, in April the average house price increased 0.2% to reach £213,000 after two consecutive monthly decreases. The result drive the annual house price growth rate from 2.1% in March to 2.6%.

Robert Gardner, chief economist at Nationwide, said that a lot will depend on how broader economic conditions transpire, particularly in the labour market but also where interest rates are concerned.

Mr. Gardner said that slower economic activity and the continual pressure on household budgets was likely to have a modest dampening effect on market activity and price growth this year.

Nationwide has predicted a growth of 1% in house prices this year, down from 2.6% last year.

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