South London and the Maudsley NHS Foundation Trust secures agreement with Legal and General
A major multimillion pound agreement that will significantly enhance mental health care for South London residents - while unlocking new investment for the local community - has now been formally approved.
South London and Maudsley NHS Foundation Trust has agreed the sale of the Lambeth Hospital site to Legal & General (L&G), which plans to deliver a £350m redevelopment, comprising around 700 build-to-rent homes, including affordable housing.
This sale is a key part of the Trust’s £186m investment programme to modernise mental health facilities. It includes the creation of a new, purpose-built home for services currently based at Lambeth Hospital, within the state-of-the-art New Douglas Bennett House on the Maudsley Hospital campus at Denmark Hill.
L&G intends to create a neighbourhood with a blend of affordable and private ren t al homes with new amenities and carefully designed public realm, operated by its residential platform to ensure high quality service and long-term stewardship.
Jane Bailey, the Trust’s Chair, said: “This is incredibly good news which is the result of many years of hard work and support from our staff, patients and their carers.
“This opportunity will help us transform how we deliver care in the state-of-the-art hospital, New Douglas Bennett House, that will be opening later this year. This provides much needed local invest ment into NHS mental health services alongside the creation of 700 new homes and employment opportunities for our local community.”
Ade Odunlade, Interim Chief Executive Officer, said: “We are delighted to have reached this positive agreement with L&G, which directly supports our mission to improve mental health services and provide modern, therapeutic spaces for the residents of South London.
“This partnership will also bring wider investment into Lambeth, delivering real benefits for the local community. We are pleased to be working with a partner that shares our commitment to social impact, local opportunity, and long-term stewardship.”
Dan Batterton, Head of Housing, Asset Management, L&G: “We’re proud to partner with the NHS to secure the future of this important site. Our focus is to create a well-designed neighbourhood with a blend of affordable and private rental homes that complements local character, supports healthier living and provides high-quality homes for a broad range of residents.
“Backed by long-term pension capital through our partnership with PGGM and Nest, we can commit to delivery through market cycles and work closely with the community and local authority to make sure the scheme delivers lasting benefits: from new public spaces and amenities to the reinvestment of proceeds into modern mental health facilities.”
This milestone comes following significant progress on the redevelopment of New Douglas Bennett House, which had previously experienced delays. The Trust continues to work closely with contractors, with the first moves into the building expected towards the end of the summer. Services will remain at Lambeth Hospital until the transition is safely completed.
The new facility has been shaped through extensive consultation with staff, commissioners, and local residents . It will provide modern, purpose designed spaces that support high-quality clinical care, recovery, and a positive working environment — helping to ensure the Trust is a Great Place to Care for patients and a Great Place to Work for staff.
Vanessa Smith, Chief Nursing Officer, added: “We are genuinely excited to be moving into a purpose built facility designed to better meet the needs of our patients and support their recovery.
“We are deeply grateful to people who use services, the community we serve and our staff for their patience throughout this journey, and we look forward to working closely with them as we prepare to move into this fantastic new building.”
Planning permission for the redevelopment of the Lambeth Hospital site was approved in December 2021. L&G is expected to consult on making modest refinements to the existing plans.
