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Councils set up 58 housing companies since 2012
Almost a quarter of councils in England have invested £130m in setting up 58 new housebuilding companies since 2012, exclusive Inside Housing research has revealed.
However, many of these companies are yet to deliver new homes at scale, while only one has paid any dividend back to its council so far.
Responses from more than 200 English councils to a Freedom of Information Act request showed 49 had set up a combined total of 58 companies, subsidiaries and joint ventures since April 2012.
Another five councils said they were in the process of setting up companies.
Inside Housing research from December 2016 revealed that more than a third of councils planned to set up a commercial house building company, to build new homes locally and provide new income for councils.
But so far the 58 companies have delivered a combined total of just 528 homes through development or purchase.
A total of 35% of these homes were affordable products, such as below-market rent or shared ownership, and none were for social rent. More than half of the companies surveyed – 34, or 59% – have yet to deliver a single home.
This apparent slow progress is partly down to the fact that 41 of the firms were established within the past two years.
However, some – including Southwark Council, Richmondshire District Council and Southend-on-Sea Borough Council – have local housing companies (LHCs) which are showing no signs of life three years on.
Stephanie Cryan, deputy leader and cabinet member for housing at Southwark Council said: “To date the vehicle has not been used although the situation remains under review.
"Southwark Council is already delivering new council homes as part of its 11,000 new homes programme.”
Only one of the companies captured by the data paid any dividend to its council in 2016/17. This was Daventry Estate Company, which paid Daventry District Council £15,000.
Number of companies set up by each council
| Local authority | Number of companies | Name of companies | Date register | Investment | Completions | Affordable |
|---|---|---|---|---|---|---|
| Basildon | 1 | Sempra Homes Ltd | 19-Dec-14 | £10,600,000 | 21 | 16 |
| Bedford | 1 | Benedict Bedford Ltd | 29-Dec-16 | 0 | 0 | 0 |
| Bexley | 1 | BexleyCo Ltd | 28-Jun-17 | £2,000,000 | 0 | 0 |
| Blackpool | 1 | Blackpool Housing Company | 26-Jan-15 | £1,600,000 | 51 | 0 |
| Bracknell Forest | 1 | Downshire Homes Ltd | 29-Oct-15 | £6,332,100 | 40 | 40 |
| Broxbourne | 1 | Badger BC Investments Ltd | 08-Nov-13 | £25,000 | 28 | 0 |
| Cambridge | 1 | Cambridge City Housing Company | 15-Feb-16 | £7,500,000 | 23 | 23 |
| Canterbury | 1 | 13-Feb-17 | 0 | 0 | 0 | |
| Colchester | 1 | Colchester Amphora Homes Ltd | 1-Jun-17 | unspecified"start up costs" | 0 | 0 |
| County Durham | 1 | Chapter Homes | Aug-15 | £12,500,000 | 63 | 12 |
| Daventry | 1 | Daventry Estate Company Ltd | 19-Nov-12 | £1,000 | 0 | 0 |
| East Devon | 1 | East Devon Homes | Oct-17 | 0 | 0 | 0 |
| East Hertfordshire | 1 | Millstream Property Investments Ltd | 02-Feb-18 | 0 | 0 | 0 |
| Eastbourne | 2 | Eastbourne Housing Investment Company Ltd; Aspiration Homes | 01-May-15 | 0 | 67 | 0 |
| Eastleigh | 2 | Woodside Avenue Developments; Stoneham Park Developments | 6 Jul 17; 15 Jun 16 | 0 | 0 | |
| Fareham | 1 | Aspect Building Communities | 10-Dec-14 | £5,000 | 0 | 0 |
| Forest Heath | 1 | Barley Homes Ltd | 15-Mar-16 | £140,622 | 0 | 0 |
| Great Yarmouth | 1 | Equinox Enterprises | 28-Sep-17 | 0 | 0 | 0 |
| Greenwich | 1 | Meridian Home Start | 23-Jun-16 | 0 | 0 | 0 |
| Guildford | 2 | Guildford Borough Council Holdings Ltd; North Downs Housing Ltd | Apr-16 | £2,400,000 | 6 | 0 |
| Hammersmith & Fulham | 2 | HFS Developments LLP; HFS Developments 2 Ltd | 27 Mar 14; 19 Jul 16 | £101 | 0 | 0 |
| Hastings | 1 | Hastings Housing Company | 01-Sep-17 | £15,000,000 | 0 | 0 |
| Hinckley and Bosworth | 1 | Hinckley & Bosworth Development Ltd | 13-May-15 | £15,000 | 0 | 0 |
| Ipswich | 1 | Handford Homes Ltd | 12-Jul-17 | £10 | 0 | 0 |
| King's Lynn and West Norfolk | 1 | West Norfolk Housing Co Ltd | 09-Sep-16 | 0 | 0 | 0 |
| Lewes | 2 | Lewes Housing Investment Co Ltd; Aspiration Homes | 4 Jul 17 - 30 Jun 17 | 0 | 0 | 0 |
| Luton | 1 | Foxhall Homes Ltd | 16-Feb-17 | £130,000 | 0 | 0 |
| Mansfield | 1 | Mansfield Homes Ltd | 19-Aug-14 | £46,000 | 23 | 0 |
| Merton | 1 | Merantun Development Ltd | 09-Aug-17 | £160,000 | 0 | 0 |
| North Tyneside | 4 | Various | 11 Dec 12 - 1 Mar 17 | £4 | 18 | 18 |
| Oadby and Wigston | 1 | Bushloe Developments Ltd | 21-Dec-16 | £100,000 | 0 | 0 |
| Peterborough | 1 | Medesham Homes | 25-Nov-16 | £100,000 | 0 | 0 |
| Reading | 1 | Homes for Reading Ltd | 06-Apr-16 | £151,000 | 7 | 0 |
| Richmondshire | 1 | Mercury Housing Co Ltd | 09-Jan-15 | £1 | 0 | 0 |
| Slough | 2 | Herschel Homes; James Elliman Homes | 06-Feb-17 | £100,000 | 53 | 42 |
| South Bucks | 1 | Consilio Property Ltd | 15-Sep-17 | no | no | |
| South Holland | 1 | Welland Homes | 22-Jun-15 | £100 | 15 | 0 |
| South Kesteven | 1 | Gravitas Housing Ltd | 30-Jan-17 | £2,800,000 | 0 | 0 |
| South Norfolk | 1 | Big Sky Developments Ltd | 14-Aug-13 | £8,960,000 | 77 | 19 |
| South Tyneside | 1 | Centuarea Homes Ltd | 30-Mar-17 | 0 | 0 | |
| Southend-on-Sea | 1 | Southend Housing Ltd | 16-May-15 | 0 | 0 | 0 |
| Southwark | 1 | Southwark Housing Company | May-15 | 0 | 0 | 0 |
| Spelthorne | 1 | Knowle Green Estates Ltd | 09-May-16 | £1 | 0 | 0 |
| Stockport | 1 | Viaduct Partnerships Ltd | 15-Aug-16 | 0 | 0 | 0 |
| Stoke-on-Trent | 1 | Fortior Homes | Oct-16 | £55,000,000 | 0 | 0 |
| Swindon | 1 | Swindon Housing Company | Jun-17 | 1,500,000 | 0 | 0 |
| Test Valley | 1 | Valley Housing Ltd | 30-Apr-16 | £10,000 | 6 | 3 |
| Three Rivers | 1 | Three Rivers Homes Ltd | 24-Mar-17 | £510,000 | 0 | 0 |
| Wakefield | 1 | Bridge Homes (Yorkshire) | Jul-14 | 3,000,000 | 30 | 9 |
| Wealden | 1 | Sussex Weald Homes Ltd | 15-Dec-16 | £100,000 | 0 | 0 |
Table only includes the councils that have set up a company, more than 200 local authorities responded in total
Scott Dorling, partner at law firm Trowers & Hamlins, said: “There is no consistent picture across the whole country. Some very quickly get set up and are able to deliver because there is a ground swell of support behind it from officers and councillors and they have got sites set up.
“Others have got a lot more work to do once they have established the company to get sites identified and members fully behind the scheme. And others find that in their local area the development costs just aren’t working for them.”
Richard Auton, consultant at law firm Walker Morris, said: “I think a lot of authorities are looking at it and clearly it takes a while to set up the structure but those that have are now starting to deliver.
“It all takes time but it’s a useful vehicle for local authorities to deliver homes in their areas.”
The Localism Act in 2012 widened councils’ powers to establish LHCs.
A report published by the National Planning Forum and the Royal Town Planning Institute in December last year found 44% of councils now have an LHC.
Martin Tett, housing spokesperson for the Local Government Association, said: “Councils are setting up housing companies to help plug gaps in their local housing markets. This can aim to help meet the need for affordable homes, move-on accommodation, housing for older people or the provision of good quality private rented homes.
“But it is crucial that the Government provides a stable environment to allow councils to invest in homes from within and outside the Housing Revenue Account."
