Croydon Council has signed up to a multi-million pound partnership with Legal & General in order to deliver over 160 new homes.

The insurance company will invest £44.6m into houses and apartments in the borough and these will, in turn, be leased to the council on a 40-year term.

The rents will be set at Local Housing Allowance (‘LHA’) levels, and after the term ends, the homes will revert to the council.

The 167 new homes will be managed by Croydon Council’s housing team and offered to those on the council’s housing waiting list.

There are currently over 2,000 families requiring Temporary Accommodation in Croydon.

Cllr Alison Butler, Croydon Council’s cabinet member for homes and gateway services, said the deal would save the council around £20m in loan costs.

‘At a time when the Government is squeezing how much it funds local authorities, this innovative partnership offers us better value for money than more traditional loans available to councils, and I hope this encourages other councils and financial institutions to follow suit,’ she said.

Pete Gladwell, head of public sector partnerships at Legal & General commented: ‘Partnerships like this, between forward thinking institutions and local authorities, can also turn statutory duties such as the provision of Temporary Accommodation from revenue drains into revenue generators, enabling councils to take control of their finances.

‘Having launched our new affordable housing business last year, this investment highlights our continued determination to innovate within the sector and to work together to address the UK’s chronic housing crisis.’