Legal & General makes third social housing loan

Legal & General has issued its third social housing loan in six months – a £40m facility for Rooftop Housing Group.

This brings its commitment to the sector to £232m, including a £102m loan it provided to The Hyde Group in March 2013 which marked the commercial lending business’s first social housing loan.

Its latest loan is for a duration of twenty years, as “seven-years up is where we can add value compared to the banking market” explained Alex Gipson, lending manager at Legal & General.

The drawdown will be staggered until August 2015 in order to support the borrower’s cash flow requirements.

The debt is secured against the group’s existing assets and will help finance its development pipeline of 900 affordable homes by 2018. Funding will also come from a combination of money from grants and subsidies it puts in itself.

Rooftop operates across South Worcestershire and Gloucestershire, also providing accommodation for hospital staff as well as two retirement properties: Yates Court in Evesham and St. Oswald’s Village, Gloucester.

L&G uses long term annuity money, so long term housing and infrastructure projects suit its liabilities while providing strong risk-adjusted returns. Last month it provided a £50m, 40-year loan to Housing Solutions, and in February a £40m, 25-year loan to Thames Valley Housing Association.