23 NOV 2021 BY DAVID PRICE

Legal & General has invested a further £5.7m into its modular housing business to fund the business's growth.

Owner Legal & General Homes made the investment by purchasing one new share for £5.7m. A spokesperson said the cash would support the company's "next growth phase", which would involve early land acquisitions and improvements to its modular factory.

The spokesperson added: "Legal & General Modular Homes has schemes in Selby (pictured), Littlestone, Bristol, Broadstairs and North Horsham, bringing its pipeline to 750 homes. From its factory in Sherburn in Elmet, in Yorkshire, Legal & General Modular Homes has ambitions to build its annual housing delivery to 3,000 modular homes a year by 2024, bringing rapid and disruptive change to the construction industry."

The latest equity investment, which was completed on 2 October but not disclosed until earlier this month, is L&G's fifth such investment in the past 12 months, totalling £46.7m. All investments came through single share purchases, two of which were made in December 2020 with the others coming in March, June and October.

L&G has ploughed money into the modular business with the aim of becoming a leader in what the company is backing as a growth market. It has yet to turn a profit, in common with many startups, and in 2020 it reported a pre-tax loss of £30.2m, which followed a £30.6m loss the previous year. The company said in September that the losses were expected and the business would require a number of years of upfront investment before it could deliver homes profitably and at scale.

The business ramped up its activities in 2021, taking on an extra 350 people at the Sherburn in Elmet facility.

Competition in the UK modular housing market has heated up in 2021, with Ilke Homes securing £60m for expansion and Japanese giant Sekisui investing £18.5m in its UK operation.

By: DAVID PRICE