LONDON, March 17 British insurer Legal & General Group Plc (L&G) has bought a portfolio of low-cost housing for 252 million pounds ($419 million), continuing an investment drive into UK infrastructure.
The investment is in tune with British government policy to court private-sector investment from the likes of insurance companies to help renew a creaking infrastructure base at minimal cost to the public purse, and help ease a housing shortage.
L&G said on Monday the portfolio of more than 4,000 homes, over half by value in northwest England, would be bought from and leased back to housing organisation Places for People on a 50-year basis. Places for People will build 7,000 new housing units with the sale proceeds, spread around Britain, over the next seven years, L&G said.
L&G and other insurers are keen investors in infrastructure such as roads as well as homes because the long duration of the commitments and the steady, inflation-linked returns from rents and tolls are well suited for covering pension liabilities.
The new investment is by L&G's Retirement business, which sells annuities to pensioners who hand over their savings, accumulated during their working lives, in return for a guaranteed income until death.
"This 252 million pounds, 50-year investment demonstrates the capacity of institutions like Legal & General to help solve the UK's housing and infrastructure crisis," said L&G managing director Paul Stanworth.
Deputy Prime Minister Nick Clegg said: "This is very welcome news to build thousands of new affordable homes for people across the country."