Money

L&G and Oxford University team up for £4bn housing scheme


Legal & General has teamed up with Oxford University in a £4bn partnership to build science parks and thousands of homes for staff and students over the next decade.

The insurance and pensions group will build 1,000 subsidised homes for university and college staff, 1,000 homes for research graduates, and a further 1,000 for general sale or rent, on land provided by the university, in the first wave of the partnership.

The staff homes, which will include one- and two-bedroom apartments as well as some houses, will be rented out at a 20% discount to market prices, mainly to junior academic and support staff earning less than £40,000 a year. They will be located next to new research and laboratory facilities at a vastly expanded science park in Begbroke 8.5km (five miles) north of Oxford, a 130-hectare site (300 acres).

A second science park and graduate housing is planned for the 17.5 hectare (44 acre) Osney Mead industrial estate. Rents will be pegged to student rents at other university and college accommodation, which range from £450 a month to £675 for a newly built ensuite room.

The university, which employs 20,000 people, will retain ownership of the land and issue 60-year leases to L&G. The firm’s Future Cities business will fund the buildings and receive rent but will eventually hand the properties to the university.

David Prout, the university’s pro-vice chancellor for planning and resources, said: “Our priority is to provide good quality affordable accommodation for graduates and staff. If all goes well we would hope to do more in future.”

The funding, up to £4bn over the next 10 years, will come from L&G’s shareholder and annuity funds as well as funds managed by L&G Investment Management.

Oxford is one of the UK’s fastest-growing cities, with a population of around 155,000, and has one of the world’s top technology clusters. However, it lacks affordable residential and commercial space essential for the university to continue to attract research graduates, and support spin-out businesses, the partners said. Oxford has affordability issues similar to those in London.

First-time buyers need to earn £68,800 to purchase a home in the university town, and stump up a £101,800 deposit, according to analysis of the 20 biggest UK cities by property website Zoopla. Only London and Cambridge require higher household incomes, of £84,00 and £72,000, respectively.

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Professor Louise Richardson, the vice-chancellor of the University of Oxford, said: “We look forward to working together to address some of the most pressing challenges facing the university today.

“We will build much-needed graduate accommodation, subsidised housing for university staff, and new science parks, where academic departments, university spin-outs and commercial partners can work together to create new companies as well as high-quality jobs.”

L&G is keen to talk to other universities about similar partnerships, which it describes as a “game changer for cities”. Its Future Cities arm has already funded more than 1,000 new homes in Cardiff, Leeds, Manchester, Newcastle and Salford.



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