Hyde Group and Legal & General have formed a new investment partnership to deliver more affordable homes across the UK.
L&G is a major UK insurer, pension scheme manager and affordable housing leader that has invested more than £1bn through its L&G Affordable Homes business.
Hyde is a not-for-profit housing, property and community services provider, that owns or manages 125,000 homes.
The 50/50 partnership is launching with a seed portfolio of over 1,000 homes – encompassing social rented and shared ownership homes – with the ambition for further joint investment.
The homes will be acquired by two existing For-Profit Registered Providers (FPRPs) which are jointly owned by Hyde Group and L&G (Halesworth Limited and Lanecroft Homes Limited).
They claim the partnership demonstrates how pension capital and institutionally-owned registered providers can work together with housing associations, alongside public investment, to deliver additional affordable homes – aiming to generate stable, inflation-linked returns for pension savers while delivering homes the country urgently needs.
The partnership will be jointly equity financed by Hyde and L&G.
It will be supported through L&G’s annuity portfolio, which deploys capital into productive assets that aims to generate income to support long-term pension commitments, as part of L&G’s £2bn commitment to drive positive social impact and growth across the UK.
Through this funding model, which leverages L&G’s long-term patient capital and the Hyde Group’s footprint, as both a social housing charity and national deliverer of housing management (through its ownership of Pinnacle Group), the JV will be able to share financial obligations and invest on a greater scale more quickly.
Hyde recycles any profits into creating more affordable housing, and by re-investing in existing homes, the partnership will work together to create more high-quality, sustainable homes.
Hyde’s approach is that all new homes it builds will reach a minimum of EPC high band B by 2027, and EPC band A by 2030, and L&G’s longstanding commitment that all new homes will be Net Zero in operation by 2030.
Through the partnership, housing management services will be provided by the Hyde Group, including using Pinnacle Group’s platform.
Hyde acquired Pinnacle Group in October 2024, creating a national housing platform that develops, manages and services affordable homes at scale across all four nations of the UK.
Pinnacle, which manages over 70,000 homes, already manages homes on behalf of L&G Affordable Homes under a ten-year framework agreement, providing tenancy management, building compliance, repairs and maintenance across a portfolio of c.3,000 affordable rent and shared ownership homes, with a further pipeline of over 500.
A statement says: “This is the beginning of a long-term partnership that will help deliver a significant pipeline of new, high-quality environmentally sustainable homes for the future.
“The partnership helps accelerate L&G’s ambitions to deliver 10,000 new social and affordable homes by 2030, and Hyde is due to complete over 5,500 homes in the next five years.”
The partnership will also have the ability to invest in homes requiring green retrofit. This strategy could accelerate the improvement of customers’ homes, reduce energy bills, improve quality of life, and help deliver positive environmental impact.