M&G INVESTMENTS has agreed to provide an east London housing association with a £40m loan as part of its expansion into the UK housing sector.
The pension fund manager said the 30-year loan to Estuary would help build 400 homes over the next three years. Half the homes will be built in London boroughs while the remainder will be in Essex.
Pension fund managers and insurers including M&G, Aviva and Legal and General have been stepping up their exposure to the housing sector by filling the lending void left by cash-strapped banks.
M&G Investments has invested £5bn on social housing in the UK to date. The deal comes after it provided £50m of financing to a Welsh housing association in February to build 600 homes.
“Estuary plays a vital role in a region where there is both a severe shortage of housing and a growing population,” Mark Davie, head of social housing at M&G, said.
“Financing of this type for housing associations enables them to contribute towards meeting the growing demand for affordable housing in their local communities,” he added.