Overview

‘Opening doors - The potential of joint ventures to deliver new homes via Local Housing Companies’ was commissioned by Nabarro LLP to get a clearer view on one of the key issues facing local government today – identifying the most effective methods of delivering new homes. This report focuses on joint ventures, investigating LHCs as one option.

As 2010 begins, the nation enters a critical decade for housing. Significant numbers of new homes need to be built to cope with future demand. The government has set a target of building three million more homes by 2020 and this has led to several initiatives being launched to help reach this goal. One of the most important was the proposal for Local Housing Companies (LHCs) in the 2007 Housing Green Paper.

LHCs were promoted as a ground-breaking joint venture option enabling local authorities to offer affordable homes to key workers and first-time buyers. Under LHCs, local authorities provide sites on their own land, while the private sector provides development and funding skills to build the homes, with a significant element at an affordable level. Crucially, as an LHCis a 50:50 joint venture, local authorities retain control and share equally in the future rewards and risks with the private sector.

Fourteen pilot schemes were launched, and it was hoped that the first LHCs would be in place during 2008, with development taking place in 2009/10. However, the timetable coincided with the recession. There are now likely to be future reductions in public sector funding. No LHCs have yet been delivered.

Nabarro LLPis currently involved with the London Borough of Barking and Dagenham LHCpilot scheme (one of the most advanced schemes) which envisages more than 6,000 new homes being built. This work prompted the firm to commission the nationwide view on LHCs contained in this report to identify common themes and issues.

The pressing need to deliver new homes remains. Momentum for public sector joint ventures appears to be increasing and the Treasury has been consulting on new guidance for public sector bodies forming such schemes. In this report, we ask local authorities and the private sector for their views on LHCs as a joint venture model and whether they have a workable future. The results provide a valuable and constructive insight into the issue, which we hope will make a helpful contribution to the national debate.

To read on click ‘View Briefing’