M&G Investments is backing Watford Community Housing’s affordable homes project with a £65m (€73.6m) financing deal.

The amount secured by Watford Community Housing will enable the not-for-profit UK housing association progress with the construction of 675 homes over the next three years across South West Hertfordshire.

Watford Community Housing said the 32-year financing will facilitate its ambition of building 1,000 affordable homes by 2020, of which over 100 have been already completed.

Paul Richmond, the group director of finance and resources at Watford Community Housing, said: “This new source of funding will help us deliver on our growth aspirations and our ambition to provide affordable housing in South West Hertfordshire. 

“We are committed to delivering much-needed new homes and enhancing our local community areas. We were delighted by the level of interested generated by this placement and look forward to working with M&G as an investment partner.”

Mark Davie, the head of social housing at M&G, said: “Watford Community Housing has a clear vision and ambition to deliver affordable homes to those in the area it serves.” 

Davie said this deal brings benefits to its pension fund clients by generating long term cashflows that are secured against residential property.

”It also demonstrates the important role institutional investors play in providing finance to organisations that have a positive impact on the communities they operate in and our wider society,” Davie said.