Legal & General invests £70m to accelerate development of energy-efficient homes

LGIM Real Assets (Legal & General) has announced that it has provided Saxon Weald £70m of sustainability-linked financing, to accelerate the UK’s development of new, affordable energy efficient homes.

Managing approximately 6,750 homes across Sussex and Hampshire, Saxon Weald is a housing association providing affordable rented and shared ownership homes for individuals and families, as well as properties exclusively for the over 55s.

The investment will be used to finance new homes, designed to be energy efficient with Saxon Weald targeting EPC A ratings on all new builds. The housing sector remains a major contributor to carbon emissions, with heating and hot water for UK homes accounting for 25 per cent of total energy use and 15 per cent of the UK’s greenhouse gas emissions.

Tackling this issue via a “forward-thinking” pricing structure with sustainability at its core, Saxon Weald will receive a discount on the coupon provided it meets ambitious energy efficiency targets, better supporting the communities in which Saxon Weald operate, and more widely, playing an important role in the South East’s energy transition.

Highlighting Legal & General’s longstanding ESG agenda, today’s investment brings LGIM Real Assets’ investments with ESG-linked credentials in the corporate debt space to over £400m, spanning the Social Housing, Higher Education, and Corporate sectors.

A significant proportion of this financing has gone towards the social housing sector specifically, supporting some of the UK’s largest social housing providers across major cities and regions with their decarbonisation and social impact ambitions.

Centrus worked with Saxon Weald to develop strategy and provide transaction advice. Legal counsel was provided by Devonshires and Addleshaw Goddard.

Steve Bolton, head of corporate debt, Europe, LGIM Real Assets, commented: “There’s a stark, deep-rooted supply-demand imbalance when it comes to good quality, affordable housing in the UK. This, with the backdrop of rising energy bills and the need to transition to a low carbon economy, demands innovation within the social housing sector.”

Michael Chinn, executive director, resources, Saxon Weald, added: “The new funding forms a core part of delivering our sustainability strategy and in continuing our objective of providing affordable homes.

“I’m particularly pleased with how well the teams at LGIM Real Assets and Centrus, assisted by Devonshires, structured the new funding to fit our aim to enhance the delivery of sustainable homes for our customers.”

By Matthew Neville – Correspondent, Bdaily

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