L&G now runs upmarket private housing developer Cala and delivers large-scale housing communities schemes through its housing arm L&G Homes. It is a big investor in the expanding build-to-rent sector and owns a modular housing factory in Leeds.

Legal & General Affordable Homes aims to become the leading private affordable housing provider in the country.

It will be fully operational and delivering a targeted 3,000 homes each year within the next four years.

L&G wants to accelerate building in all areas of the affordable housing market, including new build Section 106 and grant-funded affordable rent, social rent and shared ownership units.

Simon Century, Head of Affordable Housing, said: “Many housing associations are becoming increasingly highly leveraged, as they have funded significant amounts of development through debt funding for many years.

“They have no ability to raise equity and maintain a sustainable financial structure – therefore forcing many to significantly limit their growth ambitions.

“Legal & General Capital is building a more natural and sustainable model – one in which institutional investors are the long-term holders of the assets working alongside the best-in-class affordable housing operators who will provide the highest-quality housing management.”

Nigel Wilson, CEO of Legal & General, said: “Despite the fact that the UK is a great place to invest, 30 years of underinvestment have led to poor productivity, low real wage growth and numerous market failures.

“Affordable housing is a classic example of underinvestment with minimal new equity capital being deployed to the sector.

“This is not a sustainable position – either for the sector or for the 1.3m households currently on a waiting list. This important sector has now been added to Legal & General’s £15bn UK direct investment programme.”

Last month L&G took full control of fast-growing Cala Homes paving the way for it to become a major UK housing delivery business.

Cala is on track to deliver an annual capacity of 2,500 homes and revenue of around £1bn in 2020, and believes it has the capability to build in excess of 3,000 units a year.

Delivering its first three new housing communities, Legal & General’s housebuilding arm, Legal & General Homes, is bringing forward a housing pipeline of over 3,000 new homes.

These include a 78-acre site in Shrivenham, Oxfordshire with outline planning for 515 new homes, building 1,000 new homes on its 250
acre site in Crowthorne, Berkshire, called Buckler’s Park, and 1,500 new homes at its 272 acre site in Finchampstead, also in Berkshire

L&G’s total investment capability in the build-to-rent currently stands at £1.5bn. It has secured around 2,000 homes under construction or in planning, with sites in Bristol, Edinburgh, Salford, Bath, Brighton, Leeds and Walthamstow, with the aim to have 6,000 in planning, development or operation by the end of 2019.