Hyde Group and L&G to boost affordable housing in the UK

Hyde Group and Legal & General (L&G) have teamed up in a new 50/50 partnership to build more affordable homes across the UK.

L&G and Hyde Group partnership

This joint venture aims to bring together significant investment to address the critical shortage of social and affordable housing in England.

The partnership starts with over 1,000 homes, including social rented and shared ownership properties, with plans for further expansion. This collaboration is designed to show how large-scale institutional money, like pension funds, can work with housing associations and public funding to build the homes the country needs, while also providing stable returns for pension savers.

L&G will use its annuity portfolio to help finance the partnership, investing in assets that generate income for long-term pension commitments and contribute to social impact. Hyde Group, a not-for-profit housing provider, will use its expertise in housing management and its recent acquisition of Pinnacle Group to manage the homes, recycling any profits back into creating more affordable housing.

A key focus of the partnership is on sustainability. All new homes will meet high energy performance standards, aiming for Net Zero in operation by 2030. The partnership will also have the option to invest in retrofitting existing homes to improve energy efficiency, reduce bills, and benefit the environment.

This long-term partnership combines L&G's track record in affordable housing and Hyde's extensive experience in housing management, creating a powerful force to deliver thousands of new, high-quality, and environmentally sustainable affordable homes in the coming years.

Andy Hulme, Group chief executive of the Hyde Group, commented: “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. With L&G’s long-term capital and our national platform, we can deliver more homes, faster.”

Catherine Raynsford, managing director – stock acquisitions, L&G Affordable Homes, said: “This new partnership with Hyde marks an exciting milestone, combining our heritage and expertise with an innovative approach that aims to attract institutional investment and accelerate the delivery of much-needed affordable housing nationwide.”

Gareth Mee, CEO of Institutional Retirement at L&G, commented: “The UK needs nearly a million affordable homes, and L&G is committed to driving the investment and action needed to meet this challenge.”