Legal & General has teamed up with Oxford University in a £4bn partnership to build science parks and thousands of homes for staff and students over the next decade.
The insurance and pensions group will build 1,000 subsidised homes for academic and support staff, 1,000 homes for research graduates, and a further 1,000 for general sale in the first wave of the project.
The staff and student homes will be for rent and the majority are likely to be one- and two-bedroom apartments, where there is most demand. The staff homes will be rented out at a 20% discount to market prices, mainly to people earning less than £40,000 a year.
The university will provide the land and L&G’s Future Cities business will fund the buildings and receive rent, but will eventually hand the properties to the university.
Proposed sites include a science park with research and laboratory facilities, homes and a school to be built in the village of Begbroke. A second science park and graduate housing is planned for the Osney Mead industrial estate.
The funding – up to £4bn over the next 10 years – will come from L&G’s shareholder and annuity funds as well as funds managed by L&G Investment Management.
Oxford is one of the UK’s fastest-growing cities – its population grew by 11.6% between 2004 and 2014 – and has one of the world’s top technology clusters. However, it lacks affordable residential and commercial space essential for the university to continue to attract research graduates, and support spin-out businesses, L&G said. Oxford has affordabilityissues similar to those in London.
First-time buyers need to earn £68,800 to purchase a home in the university town, and stump up a £101,800 deposit, according to analysis of the 20 biggest UK cities by property website Zoopla. Only London and Cambridge require higher household incomes, of £84,00 and £72,000, respectively.
Professor Louise Richardson, vice-chancellor of the University of Oxford, said: “We look forward to working together to address some of the most pressing challenges facing the university today.
“We will build much-needed graduate accommodation, subsidised housing for university staff, and new science parks, where academic departments, university spin-outs and commercial partners can work together to create new companies as well as high-quality jobs.”
L&G is keen to talk to other universities about similar partnerships, which it describes as a “game changer for cities”. Its Future Cities arm has already funded more than 1,000 new homes in cities such as Cardiff, Leeds, Manchester, Newcastle, and Salford.