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L&G set to invest in building new rental property

Legal & General is one of two pension funds in early talks with the Homes and Communities Agency over investment in building new rental properties.

The HCA, which is a non-departmental body sponsored by the Department for Communities and Local Government, says it has appointed a property adviser to generate investor interest.

It has been in talks with about eight organisations, including two pension funds, over building rented accommodation. Legal & General has confirmed that it is one of the funds in early talks.

A spokesman says: “We are waiting on the HCA proposals and look forward to seeing the outcome of them.”

Pension consultant Dr Ros Altmann says local authority pension funds are also rumoured to be considering investing in new rental properties.

She says: “This sort of investment makes sense. It is a sensible investment for pension funds and it is a valuable avenue to explore. This type of investment offers income stream, capital gains and has inflation potential.”

British Property Federation residential director Ian Fletcher says: “It is vital that we look at what we can do to make the numbers stack up. It is essential that ministers do not lose sight of the opportunities here.”

Evolve Financial Planning director Jason Witcombe says: “Pension funds’ sensible investment strategies usually include property exposure as it is such an important asset class. If the funds were to invest in the private rental property, it would be a useful addition.”

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