Published: October 01, 2026
A new report from LGPS Central examines how some of the challenges facing long-term pension investment in housing can be overcome and demonstrates how pension capital invested in housing can meet the investment objectives and fiduciary responsibilities of local government pension funds.
Our report, Growing LGPS Investments in UK Housing, outlines how six measures can help create a stronger pipeline of investable housing opportunities: macro-economic stability; consistent housing policy; more efficient planning; support for SME builders; greater support for local government and others to build; and the right approach to financial incentives and regulation.
The Government has already taken many steps to improve the policy environment, including recent measures such as the empowerment of Strategic Authorities, more long-term funding for affordable and social housing, increased support through Homes England, and the establishment of the National Housing Bank.
The report highlights the scale of the UK's housing shortage, noting that 208,600 net additional dwellings were added to England's housing stock during 2024/25, against the Government's target of 300,000 homes a year. It also points to pressure on affordable and social housing, with 1.34 million households on local authority housing waiting lists as at 31 March 2025, and 64,762 affordable homes delivered in England during 2024/25.
The report also outlines examples of how long-term pension capital can support more UK housing where opportunities meet the required balance of return, risk, diversification and liquidity, while remaining aligned with Local Government Pension Scheme objectives and fiduciary responsibilities. Housing, including affordable and social housing, can offer stable, potentially inflation-linked income, diversification and exposure to strong underlying demand.
The report has been published as we develop our UK Social Housing Strategy, with plans to launch a Social Housing Fund in 2027 and expand partnerships with housebuilders and housing associations. Much of the potential additional investment is expected to be delivered through direct investment structures, reducing costs and aligning with the Government's Fit for the Future reforms.
Through the proposed fund, we anticipate that the 14 local government pension funds we work with could increase their collective investment in social housing from approximately £600 million to £1 billion over time.
Richard Law-Deeks, Chief Executive Officer of LGPS Central Limited, said:
"The UK needs more homes, particularly affordable and social housing. Long-term investors like the Local Government Pension Scheme can help, where opportunities meet the investment needs of our local authority pension fund clients.
Housing, including affordable and social housing, can offer stable, potentially inflation-linked income, diversification and exposure to strong underlying demand.
Our report, published today, sets out practical solutions: stable and consistent policy, more effective planning, more support for local authorities and others to build, and the right approach to the fiscal and regulatory regime."
The full report, Growing LGPS Investments in UK Housing , is available here.
