Consortium of banks agree £150m five-year deal to back 1,000 homes rented housing push

Insurance giant L&G’s new suburban build-to-rent business has secured a £150m credit facility from a consortium of lenders designed to back its 1,000-home development pipeline.

The L&G Capital subsidiary, which is called L&G Suburban Build to Rent (LGSBTR) and was set up at the end of 2020, said it had signed a five-year loan deal with Barclays, HSBC and Natwest in order to help it address the “significant demand for quality rental housing across the UK”.

L&G Suburban BTR Gt Haddon Lodge Way

L&G’s suburban build to rent scheme bought from Countryside at Great Haddon

The business was set up in order to take advantage of the recent growth in the market for purpose built traditional housing for rental, in contrast to the vast majority of the build to rent homes produced so far, which have been town- and city-centre flats in blocks, aimed at young professionals. Other build-to-rent investors such as Moda and Apache have also announced investments in the sector, and the British Property Federation has said single-family housing now makes up a growing part of the build to rent development pipeline.

The deal with the three banks follows L&G Suburban Build to Rent’s (LGSBTR) deal to buy 107 homes from fellow L&G business Cala on its Buckler’s Park site in Crowthorne in Berkshire. Last year the business also forward funded a 117-home scheme by Countryside in Great Haddon, Peterborough.

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Jane Sullivan, finance director at LGSBTR, said that to have secured a facility of this size in such a challenging credit environment was “testament to the merit of the product that SBTR is delivering”.

She added: “Now more than ever there needs to be an affordable rental option that provides a viable choice. At LGSBTR we are determined to meet that need with high quality, well managed and specifically designed properties.”

Michael Goode, director & BTR lead, NatWest, said she was “delighted” to support Legal & General in the suburban rented housing venture. “We believe the structural fundamentals will support single-family BTR in becoming a leading UK investment sector, as has been demonstrated in more mature rental markets overseas,” she said.

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