Our housing campaign

Target

Status

Deliver at least 6 major not for profit partnerships for Legal & General group businesses that provide us with insights into emerging macro trends that our business needs to better understand in 2016

Completed
Our campaigns

There is currently a severe housing shortfall in the UK, which is driving up house prices, so forcing a higher proportion of the population into sub-standard rental accommodation. The country needs 250,000 new homes each year, with the average net delivery being 160,000 homes for over 25 years. City living, modern working trends, smaller family units and the fact that people are living for longer is exacerbating the problem.

We are building more homes to provide new solutions for modern living across multiple tenures, including: Build-to-Sell; Build-to-Rent; Modular Construction; Retirement Living; Social Housing.

"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. 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."

Paul Stanworth, Managing Director of Legal & General Capital

Investing in communities

  • Together with Dutch pension fund manager, PGGM, we announced the acquisition of a Build-to-Rent development site in Bristol for up to 255 homes, as part of their newly formed joint venture. The partnership will initially invest £600m into building purpose built private rental housing across the UK, providing over 3,000 homes.
  • We launched our modular housing business. Legal & General Homes Modular, which will seek to modernise the home building industry by providing modern, precision engineered factory manufactured houses through its new factory in the North of England.
  • Our build-to-rent housing pipeline reached 800 homes, with 135 additional new homes in Salford, Manchester, bringing the total to 225 homes.
  • We received a 'Resolution to Grant Planning' for our Walthamstow development, giving approval for 440 new homes, bringing our committed build-to-rent pipeline to around 1,100 homes.

Through the creation of a new build-to-rent asset class, we are looking to use its long-term capital to help address the chronic long-term lack of supply of housing and meet the increasing demand for affordable, quality rental accommodation.

Looking ahead, we see retirement living and affordable accommodation as further areas for development. We believe that the UK needs to widen the options available for retirement communities and are looking to support and invest in retirement homes, maximising the positive impact of affordable accommodation with the right home and care services.

Modular homes

The UK has been building homes the same way for decades (primarily on-site), but labour shortages and a constant undersupply of new homes means modern techniques are required. To address this problem, we launched our new sustainable strategy focused on modular housing. This process seeks to modernise the industry with factory assembled homes constructed in the largest modular housing factory in the world, based in Sherburn, Yorkshire.

The operation involves several production lines fulfilling various stages of the house-build in an approach similar to car production. The homes are precision engineered and fitted out in an efficient factory-controlled process environment before being delivered to site.

This approach saves significant time and cost in the construction of new homes and the precision engineering delivers a product that is very energy efficient, thus reducing the energy intensity and long-term running costs.

We are targeting 7,000 units per year from our factory which could build 3,500 energy efficient modular homes.

What we do

We have provided Shelter with funding to set up a homestarter programme in Birmingham. The aim of the programme is to improve the ability of our service users to sustain their tenancies and reduce their reliance on Shelter services by;

  • Providing a box of essential household items
  • Providing a DIY assistance and up-skilled through Shelter’s DIY adviser.

We continue to support Shelter with our fundraising and “brokering change” scheme raising over £10,000.

The L&G Mortgage Club Awards in 2016 raised £3,245 to support Shelter.

The Brokering Change scheme is also still going strong with brokers donating over £4,000 to Shelter over the course of the year.

What we do

The Bank of Mum and Dad research in 2016 shows the role parents play in helping their children get on, or move up the property ladder. Parents will lend over £5 billion, providing deposits for over 300,000 mortgages, purchasing homes worth £77 billion in 2016. The Bank of Mum and Dad is the equivalent of a top 10 mortgage lender in the UK and will be involved in 25% of all property transactions that take place in the UK market this year.

The generosity being displayed by UK families doesn’t make up for intergenerational unfairness – younger people today don’t have the advantages the baby-boomers had, including cheap housing that delivered windfall gains. People will always want to help family members – it is a natural thing to do. Relying so heavily on the Bank of Mum and Dad however risks increasing inequality as many young people today are not lucky enough to be able to access parental support when buying a home, or can’t afford to buy even with parental help.