The Labour government’s Pensions Minister, Emma Reynolds, has expressed strong support for a significant new investment initiative in the Build To Rent (BTR) sector. This follows the announcement that UK pension scheme Nest, in collaboration with finance giant Legal & General, will invest up to £1 billion in BTR projects.
Investment Details
Initially, Nest and Legal & General will channel approximately £350 million into BTR schemes, expanding upon existing initiatives led by Legal & General. This investment aims to address the critical shortage of housing supply and enhance the rental market by providing high-quality rental homes.
Government Endorsement
Emma Reynolds, who formerly served as shadow housing minister, praised the move, highlighting its potential to both support community development and provide lucrative investment opportunities for pensioners. Reynolds stated, “Today’s announcement highlights the opportunities for our pensions sector to contribute to our communities and grow the economy. I am delighted that Nest is harnessing the financial power of pensions to deliver more of the homes this government has pledged to build, which also serves as an excellent investment opportunity for future pensioners in their scheme.”
Reynolds emphasized that the government’s pensions review aims to unlock significant investment in the UK economy and promote long-term growth assets. The new BTR schemes will focus on building on brownfield sites in city centers, with all new homes aiming to achieve net zero operational carbon by 2030.
Nest and Legal & General’s Partnership
Nest has highlighted its strategic approach to investing in the UK market, aiming to boost member pensions and support economic growth. A spokesperson for Nest noted, “We’ve been carefully considering the UK market and where best to invest so that we can help boost our members’ pensions and support economic growth. There’s a critical shortage of housing supply coupled with increasing demand for high-quality rental homes.”
The spokesperson also underscored the benefits of extending Nest’s partnership with Legal & General into the BTR sector. Legal & General and PGGM have already achieved success in this area through their joint venture, the Access Development Partnership. Since 2016, Legal & General has invested over £3 billion into the BTR sector, delivering more than 10,000 rental homes. This new investment will further expand their residential platform, one of the largest and most diverse in the UK.
Impact and Future Prospects
The partnership’s expansion into BTR is expected to have a substantial impact on the UK rental market, addressing housing shortages and providing high-quality rental options. By involving international investment through PGGM, the initiative aims to enhance its effectiveness and support broader housing needs across the UK.
This move aligns with broader efforts to leverage pension funds for public benefits, creating a win-win scenario where financial investments support community development and offer solid returns for pension scheme members.
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