Pension Insurance Corporation (PIC) has invested £50 million in a 125 affordable and shared ownership homes development in London.
The development was made possible through a £4.9 million grant from the Mayor of London’s Affordable Housing Programme.
This is the first investment as part of a long-term partnership with London Square Group (London Square), a residential developer operating in Greater London, and Square Roots, the independent affordable housing provider set up by London Square.
PIC aims to invest £500 million over the coming years to develop affordable homes to help alleviate the housing shortage in Greater London, whilst providing cash flows to back the pensions of PIC’s policyholders.
The 100 per cent affordable scheme, comprising 125 high quality affordable rent and shared ownership homes, is being developed on the former Hawks Road Health Clinic site in Kingston upon Thames, Surrey, which became surplus to NHS requirements after health services were moved to other sites in the borough. It will provide 44 apartments to be rented at London Affordable Rent (‘LAR’) levels and 81 apartments available for shared ownership, with on-site amenities for residents including play space. The LAR homes will be set at rents that the Mayor of London views as ‘genuinely affordable’ and will be let to local residents who are most in need. The shared ownership homes will allow many medium income households to fund the deposit needed for homeownership, something which has proved difficult through traditional routes, despite many having stable employment. London Square is acting as contractor/developer, with Square Roots as the affordable provider. Construction of the main buildings is now under way. The development is expected to be completed in November 2025.
Allen Twyning, Investment Director at PIC, said: “We are excited to be partnering with London Square and Square Roots on this development and our inaugural equity investment in social housing. We are also delighted that a grant was secured from the GLA Affordable Housing Programme that has made the overall scheme viable, given the high interest rate environment, and inflated building costs. Not only does this create secure, low-risk cashflows with which we can pay the pensions of our policyholders pensions, but it creates huge social value in Kingston upon Thames.”
Adam Lawrence, Chief Executive of London Square, said: “Our new partnership with long-term investor PIC is excellent news for London Square and Square Roots, enabling us to deliver another 100 per cent affordable scheme, making an important contribution to the housing shortage, and creating homes and communities of the highest quality in a well-connected location where people will choose to live. The scheme will also support the local economy in Kingston, with the creation of jobs during the construction phase and opportunities for apprenticeships and local suppliers.”
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