A total of £44.6 million – that is how much Legal & General is pouring into a ground-breaking housing initiative for the benefit of Croydon and neighbouring boroughs.
In partnership with Croydon Council, the British insurer is investing the amount to provide 167 homes to families on the housing waiting list. As part of the collaboration, the properties will be leased to the council on a 40-year term, with rents set at local housing allowance levels. After four decades, the homes will belong to Croydon Council.
Described as a sector-first, L&G’s investment does not require government affordable housing grants nor does it rely upon Section 106 contributions. According to the group, its pioneering model has the potential to be rolled out across other London boroughs and UK local authorities.
“We want to enable society to shape its future through our investments; investing into sectors where we can make a real difference,” commented L&G public sector partnerships head Pete Gladwell. “This means enabling some of the most vulnerable in society to shape their world by providing stable addresses to apply for work from, and a kitchen table where their children can study.
“Partnerships like this, between forward-thinking institutions and local authorities, can also turn statutory duties such as the provision of temporary accommodation from revenue drains into revenue generators, enabling councils to take control of their finances. Having launched our new affordable housing business last year, this investment highlights our continued determination to innovate within the sector and to work together to address the UK’s chronic housing crisis.”
In Croydon alone, more than 2,000 families require temporary accommodation. With the insurer’s investment, which is being made on behalf of Legal & General Retirement Institutional, Croydon Council will be offering a mixture of houses and apartments to those on its housing waiting list. The homes will be managed by the council’s housing team.
Commenting on the alliance, Croydon Council’s cabinet member for homes and gateway services Councillor Alison Butler said: “The council set up Croydon Affordable Homes so hundreds of local families can get good-quality homes with secure tenancies, and Legal & General’s investment will save us around £20 million in loan costs that means we can assist even more families in the long term.
“At a time when the government is squeezing how much it funds local authorities, this innovative partnership offers us better value for money than more traditional loans available to councils, and I hope this encourages other councils and financial institutions to follow suit.”
