L&G’s build-to-rent fund receives £50m from Scottish government bank

L&G’s BTR fund incorporates environmental, social and governance (ESG) standards, with targets to achieve net zero operational carbon for all new buildings within its portfolio by 2030. Its buildings aim to achieve an Energy Performance Certificate (EPC) B rating or higher.

The bank said its investment in the fund also aligns with its mission to address Scotland’s housing shortage and support the transition to net zero.

Established in 2020, it provides debt or equity investments to businesses and projects that support the development of the Scottish economy.

The Scottish government has committed to capitalising the bank with £2bn in its first 10 years. Over time, as the bank’s initial investments are repaid, it will reinvest those funds in more businesses and projects, creating a “perpetual investment fund” to support the Scottish economy.

The bank’s participation in L&G’s BTR fund came after the Scottish government laid out regulations under the Housing (Scotland) Act 2025 to exempt BTR and mid-market homes from rent controls earlier this year.

Last month, Inside Housing Living investigated whether making BTR homes exempt from rent controls in Scotland after years of uncertainty is enough to restart the market.

L&G currently has £5bn of assets under management across its housing platform. Through its BTR strategy, L&G has deployed more than £4bn of capital to build more than 10,000 homes across the UK.

Nicola Douglas, executive director of sustainable investment at the Scottish National Investment Bank, said: “High-quality private rental homes are an essential part of meeting Scotland’s housing need and creating thriving places, and the build-to-rent market is an established route to attracting private capital at scale.

“The fund’s focus on delivering high-quality, sustainable homes aligns [with] the bank’s approach, and it supports tenants by offering professionally managed homes that support workforce mobility and a broad range of modern renters’ needs, all while breathing new life into urban neighbourhoods.”

Dan Batterton, head of housing at L&G Asset Management, said: “BTR is a core component of L&G’s wider housing strategy, enabling us to deploy patient, long-dated capital into areas of acute need while delivering resilient, stable returns and enduring social and economic value.

“This latest investment further strengthens the fund’s ability to scale its development pipeline and accelerate delivery, as it continues to see strong interest from investors seeking long-term exposure to the UK rental market.”

In January, the Scottish National Party government announced More Homes Scotland, an executive agency, will be set up next year and will be fully functional by 2028-29.

The agency’s key areas of focus include large-scale affordable housing schemes, and it will work with the Scottish National Investment Bank to “make best use of private finance”.