In brief: How Legal & General can improve its real estate impact strategy

Legal & General Affordable homes has amassed a portfolio of 5,781 houses since its launch in 2018.

Legal & General Capital should make more use of its brand and name recognition if it wants to wants to maximise the potential of its real estate impact work, according to its latest impact report produced by The Good Economy.

The report provides an in-depth look at the affordable housing strategy at one of the UK’s largest investors of impact capital: useful insight for those looking to understand the risks and opportunities of the UK affordable housing sector.

Legal & General Affordable Homes (LGAH), the real estate impact subsidiary of the UK insurer’s alternatives platform, was launched in 2018 to invest in UK housing projects. Its assets now total £999 million (€1.15 billion; $1.21 billion), and its portfolio is made up of 5,781 homes.

In compiling the report, The Good Economy has gathered numerous metrics to evaluate the strategy’s performance against its stated goals of increasing the supply of affordable housing and funding sustainable developments. The report also includes recommendations for how LGAH can maximise the potential of the strategy going forward. These are:

  • Further prioritise investments to supply homes where rents are set at, or below, the Local Housing allowance (the UK housing benefit scheme available to private renters). At present, 69 percent of the properties in LGAH’s portfolio meet this criteria.
  • Use its brand and strategic influence to support the housing providers with which it partners. This could include communicating the impact of regulatory changes.
  • Consolidate its reporting of sustainability metrics into a consistent set of KPIs. LGAH currently uses different metrics to report to a range of stakeholders. A single set of standards would allow LGAH’s sustainability to be implemented more efficiently and effectively.