A new partnership model could unlock up to £9 billion in additional annual investment in affordable housing delivery, it has claimed.

In a whitepaper published today, L&G claims that if the partnership registered provider model (Partnership RP) was adopted by housing Associations, government and investors at scale across England, it could support the delivery of 80,000+ affordable homes a year without additional government subsidy

L&G says the model is designed to appeal to long‑term pension capital, including LGPS investors, seeking stable, inflation‑linked returns from regulated affordable housing.

L&G has already put some of the principles underpinning the Partnership RP model into action through its partnership with Hyde Group, announced last month, marking the first deal of its kind in England.

The whitepaper, Delivering Affordable Housing Growth; a Partnership Approach for England, sets out a new solution to unlock significant long-term institutional capital for affordable housing across England and accelerate delivery.

Partnership RPs are joint ventures between a housing association and an institutional investor. Under the model, a housing association sells homes to the joint venture and uses capital from the sale to build new affordable homes and upgrade existing stock. All homes remain within the regulated social housing sector, with rents and resident protections unchanged and the condition of the homes improved.

According to L&G, the partnership model will be an option for housing associations with suitable stock and growth ambitions, alongside institutional investors seeking long-term, inflation-linked income. The standardised approach is designed to channel more pension and insurer capital into the sector, helping housing associations rebuild their balance sheets, improve existing homes to benefit occupiers, and increase affordable housing delivery.

With c.2.9 million homes owned by housing associations across England, analysis in the whitepaper purports to shows that, for every five homes transferred into a Partnership RP, the model can create capacity to deliver at least one additional affordable home, over and above existing delivery and at no cost to the UK Exchequer.

If adopted widely, new affordable home delivery could reach up to 800,000 in a decade – without expanding the government’s grant programme, the whitepaper says. Delivering this volume of homes without Partnership RPs would require over £2bn a year in additional government grant funding.

António Simões, Group Chief Executive Officer, L&G, said: “Solving the UK’s housing challenge is a shared responsibility which requires fresh thinking and long-term commitment – pension capital has a unique role to play in this transformation. Our new partnership model with Housing Associations is designed to unlock investment at scale — accelerating the delivery of affordable homes across the country. If adopted widely, this approach could mobilise over £9bn of net new investment every year and support the delivery of more than 80,000 affordable homes annually, all without adding pressure to the public purse.”

Gareth Mee, CEO, Institutional Retirement at L&G, said: “Investors like L&G are already helping to deliver social and affordable homes across the UK, and this model gives us – and other institutional investors – the ability to go further by putting long‑term pension capital to work where it is needed most, while delivering returns for our investors.

“Through our partnership with Hyde, we have already put some the principles of a Partnership RP into action. We now hope other long‑term investors and Housing Associations will join us in adopting this model to help deliver the affordable homes the country needs.”

Andy Hulme, Group Chief Executive of the Hyde Group, said: “This country needs a growing and vibrant affordable housing sector so we can provide high quality homes that people can afford.  We welcome this work. It shows the potential for scalable partnerships between institutions and traditional Housing Associations which can support building more new homes alongside investing in existing homes.”

L&G has invested over £1bn of its own capital into affordable housing since Legal & General Affordable Homes was established in 2018, alongside £750m of third-party capital, funding and delivering more than 9,000 homes across England.