Legal & General grows affordable housing stock by 82 per cent

Legal & General Affordable Homes Limited, its first registered provider, reported a 73 per cent drop in operating surplus to £3.3m in the year to the end of December 2022. This was “largely attributable to property valuations”, a spokesperson said.

The RP, which operates 1,950 homes, last month became the first for-profit provider to gain a compliant rating with the Regulator of Social Housing.

L&G said its affordable homes business is “well positioned to address a growing market demand” as its continues with its patient capital strategy.

More widely, L&G said it delivered around 5,000 homes last year across all its housing entities, which includes private housebuilding firm Cala, its build-to-rent arm, its retirement living division Inspired Villages, and its modular housing business. 

Cala was a bright spot for L&G as the business reported a 27 per cent jump in pre-tax profit to £169m in 2022, off an increased turnover of £1.36bn.

L&G did not disclose latest figures for its modular homes business, which has racked up significant start-up losses since it was established in 2016. In its last reported full year to the end of 2021, L&G Modular reported a pre-tax loss of £36.9m. L&G said last week that the business “continues to work towards profitability”.

Looking ahead for all its housing businesses, L&G acknowledged the uncertain market conditions.

“Whilst 2023 presents a more challenging outlook for housing due to increases in cost to the consumer, our multi-tenure approach provides opportunity to grow our portfolio,” it said.

“We will continue to invest thoughtfully through the cycle, benefitting from our large stock of patient capital waiting to be deployed.”

As a group, L&G reported a seven per cent rise in annual pre-tax profit to £2.66bn. 

Nigel Wilson, chief executive of L&G, branded it a “strong result… ahead of market expectation”. Mr Wilson announced in January his plans to step down from the group after a decade at the helm. He will stay in post until a successor is found.