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Councils are taking control of housing delivery through mergers and housing companies

As three Dorset councils plan to merge and others set up companies and joint ventures, Matt Carroll and Graham Hishmurgh looks at what this all means for housing delivery

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Are council mergers a new trend? By @altairltd #ukhousing

How councils are increasingly looking at mergers, JVs and setting up companies to boost #ukhousing

The case for increasing capacity within local authority budgets through mergers and delivery of housing vehicles appears strong and there is increasing interest among local authorities in exploring these options.

Having worked with a number of local authorities on housing options; on setting up and supporting local housing companies; and across the pond on housing association mergers and partnerships, we think there are some significant advantages for these arrangements.

We have been fortunate to support the likes of Basildon, Thurrock and Medway at various stages of the journey in considering and establishing wholly owned local housing companies.

“The case for increasing capacity within local authority budgets through mergers and delivery of housing vehicles appears strong.”

We set up one of the very first, Red Door Ventures in Newham, which is now an established commercial residential developer with a pipeline in excess of 500 homes.

Sempra Homes, Basildon’s wholly owned company, is now well on the way to delivering 580 new, affordable homes for local residents, providing a return to the council and addressing pressures on wider council budgets such as homelessness and social care.

This ability of councils to take control over housing delivery – including the right types of housing, infrastructure, amenity and pace of delivery as well as financial returns – should not be underestimated, with projections by The Smith Institute suggesting councils could build up to 15,000 new homes by 2022 – an important contribution to new housing supply.


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The current housing market and political climate provide the ideal conditions to progress with this brave new world in housing delivery.

Similarly, good mergers can bring economies of scale, pooled expertise, and efficiencies.

There are, though, some real challenges that should not be underestimated for both.

“Good mergers can bring economies of scale, pooled expertise, and efficiencies.”

It takes time and effort to set up a housing company and to deliver the benefits of merger.

It takes specialist development skills and also project management skills, as well as a required understanding of local politics.

Development can be a risk-associated, time-consuming process – and interestingly local authority planning departments, with their quasi-judicial role, don’t necessarily make it any easier for a housing company to build than a private sector or housing association developer.

On mergers, to be successful there needs to be a clear and compelling business case that delivers both financially and locally. It requires constant attention to realise the benefits post-merger. For local authorities, centrally procured services must be seen to deliver at a very local level.

Mergers and joint working are subject to the politics of the joining parties.

The tri-borough shared services arrangement in London between Hammersmith and Fulham, Kensington and Chelsea and Westminster City Council was never able to deliver on its promises, once there was a change of administration in one of the authorities.

“For local authorities, centrally procured services must be seen to deliver at a very local level.”

Perhaps most importantly, for mergers to deliver they require compromise on decision-making, though they should never mean compromise on vision.

The Dorset councils’ proposed merger may signal a new trend in local government.

The lessons from housing association mergers would be well worth learning.

Matt Carroll, director; and Graham Hishmurgh, principal consultant, Altair

Confirmed council housing companies set up to date

Local authorityNumber of companiesName of companiesDate registerInvestmentCompletionsAffordable
Basildon1Sempra Homes Ltd19-Dec-14£10,600,0002116
Bedford1Benedict Bedford Ltd29-Dec-16000
Bexley1BexleyCo Ltd28-Jun-17£2,000,00000
Blackpool1Blackpool Housing Company26-Jan-15£1,600,000510
Bracknell Forest1Downshire Homes Ltd29-Oct-15£6,332,1004040
Broxbourne1Badger BC Investments Ltd08-Nov-13£25,000280
Cambridge1Cambridge City Housing Company15-Feb-16£7,500,0002323
Canterbury1 13-Feb-17000
Colchester1Colchester Amphora Homes Ltd1-Jun-17unspecified"start up costs"00
County Durham1Chapter HomesAug-15£12,500,0006312
Daventry1Daventry Estate Company Ltd19-Nov-12£1,00000
East Devon1East Devon HomesOct-17000
East Hertfordshire1Millstream Property Investments Ltd02-Feb-18000
Eastbourne2Eastbourne Housing Investment Company Ltd; Aspiration Homes01-May-150670
Eastleigh2Woodside Avenue Developments; Stoneham Park Developments6 Jul 17; 15 Jun 16 00
Fareham1Aspect Building Communities10-Dec-14£5,00000
Forest Heath1Barley Homes Ltd15-Mar-16£140,62200
Great Yarmouth1Equinox Enterprises28-Sep-17000
Greenwich1Meridian Home Start23-Jun-16000
Guildford2Guildford Borough Council Holdings Ltd; North Downs Housing LtdApr-16£2,400,00060
Hammersmith & Fulham2HFS Developments LLP; HFS Developments 2 Ltd27 Mar 14; 19 Jul 16£10100
Hastings1Hastings Housing Company01-Sep-17£15,000,00000
Hinckley and Bosworth1Hinckley & Bosworth Development Ltd13-May-15£15,00000
Ipswich1Handford Homes Ltd12-Jul-17£1000
King's Lynn and West Norfolk1West Norfolk Housing Co Ltd09-Sep-16000
Lewes2Lewes Housing Investment Co Ltd; Aspiration Homes4 Jul 17 - 30 Jun 17000
Luton1Foxhall Homes Ltd16-Feb-17£130,00000
Mansfield1Mansfield Homes Ltd19-Aug-14£46,000230
Merton1Merantun Development Ltd09-Aug-17£160,00000
North Tyneside4Various11 Dec 12 - 1 Mar 17£41818
Oadby and Wigston1Bushloe Developments Ltd21-Dec-16£100,00000
Peterborough1Medesham Homes25-Nov-16£100,00000
Reading1Homes for Reading Ltd06-Apr-16£151,00070
Richmondshire1Mercury Housing Co Ltd09-Jan-15£100
Slough2Herschel Homes; James Elliman Homes06-Feb-17£100,0005342
South Bucks1Consilio Property Ltd15-Sep-17 nono
South Holland1Welland Homes22-Jun-15£100150
South Kesteven1Gravitas Housing Ltd30-Jan-17£2,800,00000
South Norfolk1Big Sky Developments Ltd14-Aug-13£8,960,0007719
South Tyneside1Centuarea Homes Ltd30-Mar-17 00
Southend-on-Sea1Southend Housing Ltd16-May-15000
Southwark1Southwark Housing CompanyMay-15000
Spelthorne1Knowle Green Estates Ltd09-May-16£100
Stockport1Viaduct Partnerships Ltd15-Aug-16000
Stoke-on-Trent1Fortior HomesOct-16£55,000,00000
Swindon1Swindon Housing CompanyJun-171,500,00000
Test Valley1Valley Housing Ltd30-Apr-16£10,00063
Three Rivers1Three Rivers Homes Ltd24-Mar-17£510,00000
Wakefield1Bridge Homes (Yorkshire)Jul-143,000,000309
Wealden1Sussex Weald Homes Ltd15-Dec-16£100,00000

Table only includes the councils that confirmed to Inside Housing via FOIA responses that they have set up a company

 

Read more analysis here

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