Insurance giant Prudential has announced it will help fund the delivery of 1,000 homes across Wales. The company will lend to up to 17 housing associations, allowing them to start building new projects with the support of long term finance. The projects will also receive £120m of government backed construction grants.
The funds will be administered through Prudential’s asset management subsidiary, M&G and are part of a commitment made by major insurance companies to plough significant investment into Britain’s infrastructure, in a project agreed last December. The insurers are acting since a European Union ruling that allows them to widen the types of long term investment vehicles they can put funds into.
The Coalition government announced last summer that it would spend £3bn to deliver 165,000 new homes by 2018, through housing associations. But while heralded as a major commitment from government, the plan does rely on other, private sector sources also committing funds to ensure schemes go ahead.
Speaking at the World Economic Forum in Davos – and as reported by the Daily Telegraph – Prudential’s chief executive Tidjane Thiam said: “The deal is a tangible sign of Prudential’s commitment to the long-term funding of the new housing and infrastructure we need to deliver sustainable growth for the UK.”
Prudential is a major lender to the social housing sector. It remains to be seen whether it will be so keen to back involvement in the private rented sector in the UK.