The investor is setting up a new housing arm to partner with house builders and undertake a direct delivery programme to bring forward over 1,000 mass-market homes each year from 2024.
As an investment market which is forecast to grow to in excess of £200bn, L&G aims to be the UK’s first choice for suburban family homes in areas connected to schools, transport infrastructure and key amenities.
Having launched its build to rent fund three years ago, L&G now has over 5,000 homes in operation or development in mainly multi-tenanted building across the major towns and cities.
The Suburban Build to Rent (SBTR) sector has lacked the same concentration of institutional investment, with less than 1% of the market having benefitted from patient capital investment compared to 6% for the urban sector.
Its SBTR schemes will be community-focused and service-led, offering resident’s choice, security of tenure and flexibility.
This level of offering is largely unavailable in the wider residential market, particularly outside the UK’s urban centres.
Legal & General’s SBTR developments will offer a mixture of houses and low-density apartments, while being designed to reflect new ways of living, post-Covid, such as incorporating home offices and more extensive outdoor space.
David Reid, managing director, Legal & General Suburban Build to Rent, said: “Build to rent as a sector has consistently demonstrated value to investors, delivering robust and defensive income streams, suitable for patient capital investment.
“It has shown significant resilience throughout the current crisis with strong rental collection and occupancy rates.
“With working practises and demands changing rapidly, this is an appropriate time to broaden Legal & General’s BTR investment, into the suburban single family housing market.
“This is not only about strong investment prospects; it’s about providing high quality rental housing options for the growing number of families across the UK.
“Our size and commitment to the housing market across tenures, means we’re in a strong position to lead the way in this nascent sector, delivering well-managed, service-led communities which provide a reliable and positive alternative to home ownership.”
