Member Article

North-east London one of first beneficiaries in L&G £600m housing scheme

London-based Legal & General Capital have today announced a joint scheme with Dutch pension fund manager PGGM which will see new homes built in Walthamstow as part of a £600m investment scheme.

The Build to Rent partnership will see L&G and PGGM build and rent out 3000 new homes across the country, with Walthamstow, Salford and Bristol to be the sites of the first 650 houses.

Currently, the UK falls well short of delivering the annual requirement of 250,000; building only around 50% of the target number per year.

Paul Stanworth, Managing Director of Legal & General Capital, sees housebuilding by institutional firms as a way of easing the pressure on the UK housing market. He said: “The UK rental market, compared to the US and Europe, is dysfunctional, with ever increasing rents and increasingly poor accommodation.

“For this to change, and renting to become more affordable, we need to invest in the ‘new’, and build new homes to rent, and just stop inflating the prices of old housing stock.

“At Legal & General we’re going to play our part by disrupting the market, and invest significant sums of long-term institutional money to build new rental housing, and develop a UK institutional rental market.”

PGGM has over 40 years of experience in ‘Build to Rent’ housing and owns nearly £3bn of residential investment through strategic partnerships in the Netherlands and the US.

Mathieu Elshout, Investment Director Real Estate at PGGM, added: “Investing in residential is the perfect long term real estate investment, as it provides a relatively high income security and diversification relative to other sectors.

“This partnership allows us to build and own good quality residential assets in the UK at scale, with a high degree of control over our investments.”