Insurance company Legal & General plans to invest £5Bn of the funds under its management in building as many as five new towns across the UK in the next ten years.
The company is one of the six insurers that recently promised to invest £25Bn in UK infrastructure projects. L&G chief executive Nigel Wilson told the Sunday Times that the UK needs innovative solutions to solve its housing shortage, both new towns and inner city regeneration projects.
Mr Wilson said: “If we can bring communities with us and agree planning, we’d like to build several new towns across the country. We’re already developing towns within cities, in partnership with enlightened local authorities and boroughs.”
L&G was once a significant source of funding for housebuilders until the late 1990’s when banks started chasing market share. The insurer, which has a £440Bn investment business, last year bought housebuilder Cala Homes which has a development pipeline of some 10,000 houses, in joint venture with private equity firm Patron Capital. It also has a £100 million investment in affordable housing specialist Hyde Group and has further housing association investments planned for this year.
The coalition government is reported to be spilt on the issue of new town building, with Deputy Prime Minister Nick Clegg calling for publication of a report thought to examine the benefits of new towns at Yalding in Kent and at Gerrards Cross in Buckinghamshire, both of which are Conservative heartland areas likely to oppose the developments. L&G says its proposals do not involve the report.