09.06.16
A more flexible approach to housebuilding
Source: PSE Jun/Jul 16
John Anderson, executive director of Kier Living, and Shamez Alibhai, head of Cheyne’s Social Property Impact Fund, run through the many benefits of a new £1bn housing fund that will help councils deliver more homes through an innovative alliance model.
The government’s much-publicised goal of delivering 200,000 homes a year looms large over local authorities, as the country continues to deliver less than 150,000 homes per annum, despite being out of recession. Couple this with the Housing and Planning Bill receiving Royal Assent – which includes clauses such as councils having to sell off their most valuable vacant homes – and it means the challenge of keeping pace with attrition, as well as meeting market growth, will not be easy to address.
Many local authorities hold large amounts of land but do not necessarily have the in-house resource, existing capital or the long-term funding certainty to develop on that land without help. This is why we have launched the New Communities Partnership (NCP), a £1bn fund aiming to deliver 10,000 new homes together with land-holding public sector clients.
Tailoring the mix of homes to community needs
The NCP, an alliance between Kier Living, the Cheyne Social Property Impact Fund and the Housing Growth Partnership (a joint venture between the Homes and Communities Agency and Lloyds Banking Group), will provide councils and housing associations with an innovative and flexible delivery model for building new homes on their own land, giving them the option to choose between sale and/or rental developments, and offers significant scope for affordable development.
A critical element of the model is that the public sector client has nomination rights over the tenures and mix of homes that we build, and can focus on as much affordable rental and purchase housing as they feel their communities need. Depending on the blend of private market and affordable development, there is then also the potential for the public sector client to draw long-term revenue.
Aligning to the Housing and Planning Act
The NCP also offers clients a turnkey solution because the collective expertise of the partners spans the lifecycle of home-building – from procurement, funding, site assembly and construction to sales, management and maintenance, tailored to meet the specific needs of each authority.
We refer to the delivery model as having a number of dials that councils can turn to create a bespoke solution for their community. With that flexibility comes a breadth of tenure offering that supports the agenda set by the new Housing and Planning Act. For example, homes available for rent will include discounted and market-rent solutions while homes to be built for sale will include discounted sale units for first-time buyers.
Delivering jobs and economic benefits
We will also develop sites in a socially responsible way that will offer local apprenticeships, wider employment, and sustainable economic benefits for each community. While we’re able to offer funding solutions to councils to meet their housing demand, it’s equally important we make a positive difference to the communities we will work in.
That’s why we’ll be working with all our local authority partners to ensure we create better environments and opportunities for residents, in addition to high-quality residential development tailored to community need and that will be affordable both today and into the future.
We believe that bringing responsible private capital into the UK housing sector is necessary for tackling the increasing shortfall of genuinely affordable homes across the country. Being supported by institutions such as pension funds and insurance companies, who have long-term investment horizons to match their liabilities and a need for stable, predictable cash flows, means we are working with a longer-term view than many traditional developers.
We are facing an unprecedented housing crisis across the UK, so giving each council this control and flexibility in using our model to deliver properties that meet their specific needs is something that really resonates. We know that this can take time and that each authority faces different challenges, but the housing crisis is growing rather than shrinking so we believe that more private sector solutions need to be provided in order to help meet the shortfall.
Tell us what you think – have your say below or email [email protected]