Press releases

Industry alliance formed to tackle Local Authority housing challenge

Legal & General, Laing O’Rourke, and Touchstone have formed a Strategic Alliance (“the Alliance”) to help Local Authorities deliver against ambitious housing targets and generate revenue savings by utilising land from within their purview. The combination of a national housing shortage together with revenue pressures on Local Authorities has prompted a substantial and coordinated response from these three, best-in-class UK companies. At the outset, the Alliance hopes to work with councils to deliver up to 2,000 new homes a year.

The Alliance aims to provide a ‘one stop shop’ for investment into, and construction and management of, Build to Rent housing on Local Authority sites. While each element can be procured separately by a Local Authority, the combined expertise aims to generate significant synergies for those seeking to increase direct delivery of housing schemes.

The Alliance responds directly to the challenges outlined by both the Lyons and Elphicke-House reports. The Alliance model aims to address many of the frustrations faced by Local Authorities, namely a lack of private sector investment, construction and design expertise and expert management for the newly-created homes, and the need for multiple procurement processes across many years.

The Alliance is designed to be a straight-forward process, enabling Local Authorities to lease the land to Legal & General, which then funds Laing O’Rourke to deliver homes across a range of private rented and affordable tenures. These homes are then leased from Legal & General by the Local Authority, and managed on its behalf by Touchstone. The model also includes an option for the homes to be returned to Local Authorities at the end of the lease for £1, enabling the Authority to own the homes in perpetuity and benefit from capital value growth during the term of the lease. In addition to the homes delivered, all rental income above the lease payments to Legal & General is retained by the Local Authority, creating additional revenue streams from the land released into the model.

Pete Gladwell, Head of Public Sector Partnerships at Legal & General Property, said: “The housing shortage is one of the biggest challenges facing the UK, and Local Authorities are at the sharp end of the issue. Nobody can offer an all-conquering solution but we can all do our bit to help meet the challenge. What this Alliance is trying to do is simple: make accessing quality private sector support as stress-free and financially-beneficial as possible for Local Authorities. By bringing our
individual industry expertise to the table, we hope to deliver real benefits to councils and the communities they serve.”

Stephen Trusler, Accommodation Sector Leader, Laing O’Rourke said: “The crisis in UK housing needs new delivery solutions if we are to start bridging the existing chasm between demand and supply. Our aim is for this Alliance to make a significant contribution to solving that problem, creating new homes for private rental through innovative partnerships with Local Authorities up and down the country - that make a fundamental difference to people’s lives and aspirations.”

Tim Saunders, Chief Executive at Touchstone, said: “The scale of the UK’s housing problems demands innovative approaches and more collaborative working. We believe this alliance can play a part, delivering well-built, well-managed schemes which create long-term value and places where people want to live.”


Tom Gough or Dido Laurimore
FTI Consulting
+44 (0)20 3727 1781

Notes to editors:

Legal & General Property:

Legal & General Property (LGP) is a wholly-owned subsidiary of Legal & General Investment Management (LGIM), one of Europe’s largest institutional asset managers and a major global investor. LGIM manages approximately £465bn in assets on behalf of over 3,100 clients (30 June 2014) and provides products and solutions spanning all asset classes. LGP is the third largest institutional property fund manager in the UK, managing or co-managing 17 separate funds or vehicles including three segregated mandates with an aggregate asset value of £14.5bn as at 30 October 2014.

Laing O’Rourke:

With a heritage spanning over 167 years, Laing O’Rourke is an internationally-focused engineering enterprise with world-class capabilities. We operate an integrated business model comprising the full range of engineering, construction and asset management services delivering high quality solutions for some of the world's most prestigious public and private organisations.
Committed to a sustainable future, Laing O’Rourke is re-thinking the way the built environment is designed, delivered and operates - collaborating with world-leading industry and academic partners, bringing a unique value proposition that delivers greater certainty for customers. @laing_orourke


Touchstone is one of the UK’s leading residential property management companies and has been at the forefront in promoting change in the private rented sector for the last 25 years. Touchstone provides services in respect of more than 20,000 homes across the length and breadth of the country.

Touchstone is part of the Places for People group, one of the largest property management, development and regeneration companies in the UK.