Insurance group Legal & General wants to build five new towns across Britain over the next 10 years at a cost of up to £5bn, according to its chief executive.
The firm, which manages £440bn in assets globally, said building new towns and regenerating inner cities was the best way of addressing Britain’s housing crisis, and would also meet L&G’s aim of investing more of its pension fund in infrastructure.
“If we can bring communities with us and agree planning, we’d like to help build several new towns across the country. We’re already developing towns within cities, in partnership with enlightened local authorities and boroughs,” L&G’s boss Nigel Wilson told the Sunday Times.
Wilson also said the government should scrap the Help to Buy mortgage deposit scheme in London to prevent house prices from spiralling out of control.
In a Sunday Telegraph interview, he said the scheme risked stoking a price bubble that would put homes out of the reach of all but the most affluent.
He argued house prices had reached absurd levels and said the scheme, which supports mortgages for houses up to £600,000, was pushing up demand at a time when the supply of affordable housing was the problem.
Last year, house prices increased on average by 8.4%, or 15% in London. Inflation is running at 2% and income growth remains at less than 1%, further stretching the ability of buyers to afford a home.
“Help to Buy turbo-charges an already rising market inside London – stopping it would be economically sensible and help prevent the north-south divide getting even wider,” Wilson said.
L&G said housebuilding was the key to keeping prices in check and it was keen to invest directly in infrastructure.
In December, it invested £169m in infrastructure assets including a chain of care homes and a planned new hospital. It has also taken a stake in British housebuilder Cala Homes.