08 September 2022

Legal & General signs £150m Social Loan to deliver 5,500 new affordable homes

Legal & General announces that it has signed a £150m Social Loan whereby Use of Proceeds will finance 5,500 affordable homes to help address the significant demand for affordable housing across England.

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The loan was arranged by BNP Paribas, HSBC UK, and SMBC Group, in a transaction with Legal & General Affordable Homes (LGAH).

The deal was structured as a Social Loan, which is available on projects that help tackle pressing social issues such as the delivery of more affordable housing. This is the first UK insurance syndicated Use of Proceeds social loan, and it adheres to the Loan Market Association (LMA) Social Loan Principles, with all schemes screened by LGAH’s Scrutiny Panel, who oversee the selection, evaluation and monitoring of investments. BNP Paribas acted as Social Loan Co-ordinator, Joint Lead Arranger and Lender; HSBC UK as Facility and Security Agent, Joint Lead Arranger and Lender; and SMBC as Joint Lead Arranger and Lender, with each bank committing £50m.

LGAH was launched in 2018 to increase the supply of affordable housing and now operates over 2,500 homes across the country, with a further 6,500 in its pipeline. As one of the Government’s strategic partners on the provision of affordable housing, LGAH’s mission is to significantly increase the supply, sustainability, and quality of affordable homes, aiming to deliver best-in-class customer service. Its aim is for the provision of its services to help reduce inequalities, improve people’s health and well-being, making a positive contribution to the communities it serves. The new loan will help accelerate the delivery of homes for social rent, affordable rent and shared ownership across the country.

Chris Hewitt, Financial Director of Legal & General Affordable Homes: “Since launching four years ago, Legal & General Affordable Homes has deployed institutional capital at pace to accelerate the delivery of affordable homes across the country. In the last few years, Legal & General has committed over £1bn of its own retirement funds to these efforts, and they will be used alongside this innovative social loan structure. This product reinforces our commitment to the sector, and our work to help reduce inequalities in communities across the country. Whilst we are pleased with our progress, 1.4million households remain on social housing waiting lists across the UK and there are still major challenges to address this shortfall. With a new government being formed, we hope the affordable housing agenda will be central to any new policy and look forward to continuing to work in partnership with the sector to deliver the housing the country so desperately needs.”

Read the full release here.