UK pension insurer enters affordable housing sector

Pension Insurance Corporation (PIC), a specialist insurer of defined benefit pension schemes in the UK, has launched Verda Living, a for-profit registered provider of social and affordable housing (FPRP), following approval from the Regulator of Social Housing.

PIC has invested almost £4 billion ($7.55bn) of long-term debt into UK social and affordable housing since 2012, supporting the delivery of thousands of homes across the country.

PIC said the launch of Verda Living takes a direct role in the provision of social and affordable housing, working alongside local authorities and delivery partners.

PIC added long-term, inflation linked cashflows generated will support pension payments to PIC's policyholders.

"The UK faces a severe shortage of affordable housing, with more than 1.3 million households on local authority waiting lists and rising private rents increasing pressure on household finances," PIC said.

"Traditional housing associations and local authorities face financial pressures, regulatory compliance costs, and funding constraints, limiting their ability to meet demand."

Verda Living aims to deliver high-quality, affordable, and well-governed homes, providing long-term stability for residents.

"Verda Living has been established with a strong independent board and a clear commitment to the values and responsibilities of the social and affordable housing sector. Verda Living will ensure that decisions are made in the best interests of residents and in line with regulatory expectations," Verda Living chair Nathan Warren said.

"At the same time, backing from a long-term institutional investor like PIC provides financial strength and stability, enabling Verda Living to take a patient, responsible approach to delivering and managing homes."

PIC managing director of PIC Capital Hayley Rees affirmed PIC's primary purpose is to pay the pensions of current and future policyholders.

"Verda Living will generate the secure, long-term cashflows needed to support our pension liabilities. Establishing Verda Living was a natural next step for PIC, as it enables us to play a more direct role in supporting the delivery of much-needed affordable homes across the UK," she said.