L&G’s affordable housing business reports £26m profit

The affordable housing business of insurance giant L&G made an operating profit of £26.4m in 2021 after increasing the number of homes it owns and operates to nearly 1,700.

The figures, contained in the detail of the 2021 calendar year annual results for the L&G Group, said L&G Affordable Homes (LGAH), set up in 2018, now has a pipeline of more than 7,000 homes, with an asset value of more than £1.2bn.

The ‘for profit’ registered provider, which in November announced it had set up a further four registered providers in order to diversify the funding it can attract to the sector, is aiming to grow its turnover to £775m per annum by 2025, and deliver 3,000 homes per year – up from 997 built this year.

>> Briefing: L&G Affordable Homes’ ambitious plans for expansion

L&G said LGAH’s numbers were part of a broader “bounceback in the housebuilding sector” which drove a huge leap in operating profit at the division which holds its varied housing operations, Legal & General Capital (LGC). Operating profit at LGC’s alternative asset portfolio, which includes its housing businesses, tripled to £350m, from £112m last year.

Much of this increase was due to the previously reported growth seen at its wholly-owned housebuilding business, Cala Homes, where revenue grew by 74% to £1.24bn, and profit grew 19-fold to £132m.

The firm also said it had seen “significant progress” at its modular housebuilding business, which was now on site building 440 homes, with a further 400 in the pipeline, and that growth in its later living business, Inspired Villages, continues “at pace” following a 15 year funding deal signed with the NatWest Group Pension Fund.

Nigel Wilson, group chief executive at L&G said: “The roll-out of the UK government’s levelling up programme, and our growing international businesses underscore our confidence in our ability to continue delivering on a broad range of profitable growth opportunities.”