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Housing partnerships key to boosting housing supply in London
28 June 2021
A new report from London First, in association with AECOM, Grant Thornton UKLLP and London Councils, has called on the public and private sector to collaborate more closely to create housing partnerships. This will unlock land, investment, resources, and knowledge to address the capital’s housing shortage.
The report released today – Housing Partnerships, Delivering the homes that London needs– advocates a bold approach to build the 66,000 homes a year that the capital requires. As London and the rest of the country start to focus on rebuilding the economy following the pandemic, the report explores what partnerships, specifically joint venture partnerships, can offer. Commonly used in London, joint venture partnerships have several variations, and the report highlights three of the key models; development-led, investor-led and strategic partnerships. Each is model is unique and there is no one size fits all but all can offer:
An opportunity to share and mitigate risks;
access a range of funding sources, or deliver a scheme with land investment only;
specialist skills and expertise; and
reduced costs associated with long and complex procurement processes.
Increasing housing supply in London is challenging due to the scale of investment required to meet housing need, a scarcity of land, and the complexities of building in a dense urban environment. While there is no silver bullet to increasing housebuilding in the capital, forming partnerships is one critical path to delivering new homes, helping to unlock the growing aspirations of local authorities in London to start building again.
The proportion of new build homes completed by local authorities in England peaked at 57% in 1968, compared to 1.2% today. The government recently announced a new £11.5bn affordable housing programme for 2021 – 2026, which is an increase of £2.5bn on the last. However, London’s allocation has fallen to £4bn (from £4.8bn), leaving a sizeable gap between the funding available and the £4.9bn a year that the GLA estimates is required to deliver the affordable homes that Londoners need. At a time when finances are tight, partnerships have the potential to unlock significant developments and deliver at scale, providing not only more housing but also bringing wider economic and social benefits to an area.
Commenting, Stephanie Pollitt, Programme Director for Housing at London First, said:
“The capital needs 66,000 new homes a year, and with no quick fixes on offer, bold action is required if we are to meet that target. Partnerships are not a panacea, but they have the potential to unlock projects of scale and ambition – which are critical if we are to build the homes Londoners need.”
Cllr Darren Rodwell, London Councils’ Executive Member for Housing & Planning, said:
“With 165,000 Londoners currently living in temporary accommodation – more than the entire population of cities such as Norwich (143,000), Lancaster (146,000), or Oxford (152,400) – we urgently need to build more homes in the capital.
“Housing partnerships are one of the ways boroughs are working to tackle the housing crisis, at a time when council budgets are under continued pressure. We want every Londoner to have the security of somewhere to call home, but we can only do this with more investment to significantly increase housebuilding.”
Paul Houghton, Director, Buildings and Places, Affordable Housing Lead UK&I, AECOM said:
“If we want to create sustainable, affordable, and quality housing; to a scale that can tackle London’s housing crisis, then both public and private sectors must come together to collaborate. Only then we will we create development opportunities that have a long-term legacy, benefitting not just London but setting best practice for the rest of the country.”
Sandeep Singh Bhakar, Public Services Advisory, Grant Thornton UKLLP commented:
“With challenge comes innovation; through housing partnerships the industry can seek new and innovative ways to deliver much needed homes, structure finance and share risk and reward to meet the common aspiration of creating affordable places to live in our communities. Boosting housing supply is a necessity and we’re committed to working with likeminded organisations to explore new ways to meet the government’s housing targets and help ‘build back better’ to create a more sustainable economy.”