Legal & General has raised an impressive £510 million as part of its Affordable Housing Fund’s second close, reinforcing its commitment to tackling the UK’s housing crisis.
The latest round of investment includes a £100 million contribution from London CIV, which manages London Local Government Pension Scheme (LGPS) assets, along with additional backing from social impact investor Better Society Capital. The ACCESS Pool, a collaboration of LGPS funds from Central, Eastern, and Southern Shires, has also increased its commitment with a further £20 million, following a previous allocation in 2024. This fresh injection of capital highlights the power of public and private sector collaboration in addressing the shortfall in affordable homes across the UK.
Since launching its Affordable Housing Fund in July 2024, Legal & General has seen strong investor interest, with institutions drawn to the potential for inflation-linked returns alongside a meaningful social impact. The new funds will help deliver between 3,500 and 4,000 homes, building on earlier commitments from the Greater Manchester Pension Fund and ACCESS Pool.
As part of this latest phase, Legal & General has seeded the fund with an initial portfolio of 514 homes and secured agreements on three additional projects to bring forward more affordable housing. With the current development pipeline, the fund expects to have over 1,000 homes either completed or under construction by the second quarter of 2025.
Legal & General Affordable Homes (LGAH) will oversee the development and management of these properties. Since its inception in 2018, LGAH has invested £1 billion into the sector, delivering over 8,000 homes to date.
The UK continues to face a significant shortage of affordable housing, with only around 55,000 new affordable homes built annually over the past decade—far below the National Housing Federation’s recommendation of 145,000 per year. As 1.3 million households remain on local authority waiting lists in England, the Fund will prioritise high-quality, purpose-built affordable rent and shared ownership properties in areas of greatest need.
Ali Farrell, Fund Manager at Legal & General, commented:
“The level of investor interest in this fund reflects the strong appeal of affordable housing as both a stable investment and a means of creating lasting social impact. We are delighted to welcome new partners as we continue delivering high-quality homes in communities where they are needed most.”
Christopher Osbourne, Head of Real Estate at London CIV, added:
“Our strategy focuses on increasing the supply of high-quality affordable housing, addressing an underserved part of the market while delivering strong returns for our Partner Funds. We are pleased to support Legal & General’s Affordable Housing Fund and to work alongside a respected leader in the sector.”
Drew Ritchie, Investment Director at Better Society Capital, said:
“Legal & General is playing a key role in mobilising private capital to fund affordable housing, delivering thousands of much-needed homes for families across the UK. We believe in the fund’s potential to drive long-term, sustainable impact and are excited to be part of this initiative.”
With strong investor confidence and a growing pipeline of developments, Legal & General’s Affordable Housing Fund is set to play a major role in tackling the UK’s housing crisis while delivering long-term value for investors.
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