Hyde Group and Legal & General have formed a new investment partnership to deliver more affordable homes across the UK in a deal designed to bring pension fund capital into the sector.
The 50/50 joint venture launches with a seed portfolio of more than 1,000 homes, including social rent and shared ownership, with further acquisitions planned. The homes will be held through two existing for-profit registered providers jointly owned by the two organisations.
The partnership combines one of the UK’s largest housing associations, which owns or manages around 125,000 homes, with L&G’s affordable housing arm, which has already invested more than £1bn in the sector.
The move comes as the industry faces a major funding gap. The National Housing Federation estimates England needs around 90,000 new social homes a year, while current government grant funding covers only a fraction of the total cost.
INCREASED DELIVERY
Under the model, the venture will use institutional capital alongside public funding to increase delivery, while generating long-term, inflation-linked returns for pension investors.
The partnership will also target high energy efficiency standards, with new homes expected to meet strong EPC targets and net-zero ambitions, and could invest in retrofit projects to improve existing stock.
END-TO-END SERVICE
Andy Hulme (main picture), Group Chief Executive of the Hyde Group, says: “There’s a gulf between the funding available and the funding needed to deliver the affordable homes the country needs. Grant alone will not close it.
“The only way we can close this gap is by bringing pension and other responsible capital into the mix – and that is exactly what this innovative partnership delivers.
“Hyde offers institutional investors a complete end-to-end service, from investment structuring through to managing homes and the community around them, with every penny of commercial profit reinvested in building more affordable homes and improving existing homes.
“With L&G’s long-term capital and our national platform, we can deliver more homes, faster.”
