£50m Investment Into 100% Affordable Development by Pension Insurer

As part of a larger plan to invest £500m into the sector, the Pension Insurance Corporation has recently made its first investment into affordable housing. 

With an initial investment of £50m towards the development of affordable and shared ownership homes, the former Hawks Road Health Clinic in Surrey will be turned into a 125-unit development. 

Focusing on easing the main pressure points in the housing crisis, the former NHS development will offer 100% affordable homes. Breaking this down further, it will comprise 44 apartments at the latest London Affordable Rent and 81 shared ownership properties. 

London Square, and its for-profit arm, Square Roots, will be responsible for the delivery of the project and is funded through a mixture of debt and equity. This is part of a wider long-term partnership with PIC. 

Completion is expected by November 2025

Completion of the project is expected in Q4 of 2025, with construction on the main buildings currently underway. This partnership between PIC, London Square and Square Roots is unique as the main part of the company (London Square) is the contractor/developer, while the housing arm (Square Roots) is acting as the housing provider. 

This ‘in-house’ approach isn’t uncommon but has many benefits in terms of communication with residents, and wider clients and delivering the project with all parties operating in the same direction.  

£4bn has been invested as debt in sectors including affordable housing 

Previously reported: “PIC, which has invested almost £4bn as debt in sectors including affordable housing since 2012, aims to invest £500m over the coming years into affordable homes in London to help tackle the housing shortage while providing cash flows to back the pension of PIC’s policyholders.”

The development has also received further funding through the Mayor of London’s Affordable Housing Programme, which will total £4.9m for the construction of the development. 

“We are excited to be partnering with London Square and Square Roots on this development and our inaugural equity investment in social housing,” Allen Twyning, investment director at PIC, said in a statement.

“We are also delighted that a grant was secured from the GLA Affordable Housing Programme that has made the overall scheme viable, given the high interest rate environment, and inflated building costs. Not only does this create secure, low-risk cashflows with which we can pay the pensions of our policyholders pensions, but it creates huge social value in Kingston upon Thames.”