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L&G and Oxford University team up for £4bn housing scheme
GAURDIAN ONLINE 27TH JUNE 2019 Construction of affordable homes for staff and students to take place over next decade
First-time buyers in Oxford need to earn £68,800 a year and have a deposit of more than £100,000. Photograph: Arsty/Getty Images/iStockphoto
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 workers, 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, north of Oxford.
A second science park and graduate housing are planned for the 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 company’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 about 155,000, and has one of the world’s leading 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, L&G 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 the property website Zoopla. Only London and Cambridge require higher household incomes, of £84,00 and £72,000 respectively.
Prof Louise Richardson, the vice-chancellor 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.