Legal & General Affordable Homes (LGAH) has acquired 390 Shared Ownership Homes from Orbit Group for almost £35m.

The acquisition has been funded by Legal & General’s Institutional Retirement division forming part of its ambitions to increase its investment into the affordable housing sector.

The Orbit homes are distributed across 32 local authorities, spreading across the North and South Home Counties, the East and West Midlands, and Norfolk.

LGAH, owned by Legal & General, which is a direct investor, developer, and operator in residential property, has really moved the dial to help tackle the chronic undersupply of affordable housing in the UK and are on track to deliver over 10,000 affordable homes by 2027.

With one of the largest and most diverse residential platforms in the UK, LGAH has successfully scaled up multiple operating businesses across a range of tenures, using its balance sheet capital to build houses to sell and rent, provide  retirement communities, and finding new ways to deliver affordable housing. As a result, Legal & General has delivered over 16,000 homes since 2020.

Against an acute shortage of affordable housing in the UK, shared ownership offers plenty of room for growth as local authorities seek to support more people to get on the property ladder, combining owning and renting in an affordable way.

Ben Denton, CEO at Legal & General Affordable Homes, said: “Our vision is for everyone to have a high-quality, well-managed, sustainable and affordable home. Our business model balances the need for investors to see a fair and reliable return on their investment, while injecting much-needed additional capital to grow the affordable housing sector.

“At the moment, housing associations around the country are managing to create under a third of the new homes that are required to meet current need due to lack of funding and high interest rates. By acquiring this stock we are helping to ease pressure on local balance sheets so that they can then spend their limited funds in areas of real need.

“Through this acquisition, we are not only providing another crucial affordable housing option, we are acquiring good-quality housing stock, creating assets for Institutional Retirement in order to achieve improved risk-adjusted returns for Legal & General’s shareholders.”

Andrew Kail, CEO at Legal & General Institutional Retirement, commented: “By channelling pensions capital to invest in the affordable homes sector, we are proud to help provide high quality housing across the UK. These homes, spanning 32 local authorities across the country, will help many people to get on the property ladder, while also providing long-term investment returns that can help us to deliver security in retirement for our pension holders.”

Jonathan Wallbank, group finance director at Orbit, added: “As one of the UK’s foremost not-for-profit housing groups, we’re committed to providing good quality, safe and affordable homes, and creating inclusive and sustainable neighbourhoods that prioritise the wellbeing and aspirations of residents.

“The transfer of these shared ownership homes to another responsible landlord is part of our strategy to increase geographical efficiencies and to improve customer satisfaction, value for money and services for customers.

“The proceeds will be reinvested in our homes and communities and used to build and regenerate homes in our key operational areas, supporting our mission to help address the critical lack of affordable housing in England through the delivery of over 5,700 mixed tenure, new homes and regeneration properties between 2024 and 2030.”