Legal & General 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.
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.
Its aim is for the provision of its services to help reduce inequalities, improve people’s health and well-being, and make 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 and general affordable Homes, said: “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.”
This collaboration demonstrates the power of sustainable finance to support affordable housing, wellbeing and community engagement, according to Laetitia Girolami-Boyer, sustainable finance markets director at BNP Paribas,.
Girolami-Boyer said: “The alignment with the LMA Social Loan Principles catalyses best practice in the sector, and the transparency embedded into the loan is a further feature to ensure tangible social impact.”
Robert King, head of sustainable finance at HSBC UK, added: “As a bank, HSBC UK are committed to the principle of ‘achievable change’ and supporting our clients to accomplish their business goals through tailored and innovative solutions.
“We want to show our clients how their ambitions for sustainability and social responsibility will not only have a big impact on the world around us but make good business sense. We are committed to supporting our clients’ sustainability ambitions through tailored and innovative solutions like this social loan for Legal & General Affordable Homes.”
Whilst the building of social homes is a very good thing, let’s not forget the L&G relationship with Shelter. Not only have they been corporate sponsors of the so-called charity but in Shelter’s annual accounts a while back they stated that L&G ‘collaborate’ with them on policy. Isn’t it interesting that Shelter have been great supporters of S24 which has been a root cause of landlords quitting leading to the great shortage of rental units on the market and corresponding rental inflation?
Then of course we should also remember that one of the most senior bods in the Treasury at the time Osborne announced his three-pronged attack on the PRS (S24. SDLT & CGT) was John Kingman (now Sir John) who went on to become the CEO of the L&G Group at a much increased salary.
Plus one of the senior managers at L&G had a ‘sabbatical’ when he went off to run the policy unit at No 10 under a Tory Government.
I can only speak for myself but I don’t think L&G is some sort of social hero.
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Are you are suggesting that there is corruption in high office? In a third world country perhaps but surely not in the UK?
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Yes, agree It’s a total fix. Government have been destroying the PRS to allow their friends to swoop in . Nice jobs and backhanders for the ones in power.
It’s like the large supermarkets closing all the little shops , now they set the prices and control the producer’s and manufacturer’s
The PRS employ many local businesses and pay very high taxes thanks to Osborne . Do we think that these big corporates will pay taxes? it will be the very min with their companies overseas. Do you think they will employ local people ? it will be all inhouse with cheap labour from abroad.
I suspect there will be a loophole and they will be paid well over the U credit rent.
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So you think most private ll pay taxes then ?
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Yes in some cases over 100%
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I’d like to see some of their rents & area’s.
As they ain’t gonna’ be affordable for my tenants, yet the Govt has made them a partner.
Yet people like me & many Landlords who are charging existing tenants who lived there 10+ years £565pm, who has just bought a house, new tenant paying £850, we aren’t seen good enough to be a partner.
We look after existing ones, & new rent wouldn’t have to be this expensive, but we just don’t know where the next Govt or Council attacks is coming from, so we got to get what we can while we can.
And Govt has made it so that the demand is humongous for some of us.
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