Social housing has received another boost after a consortium of housing developers and investors joined forces to create a £1bn fund to build homes on local authority-owned land, writes property developer Richard Carr.
This partnership has been brought together by Kier and Cheyne Capital, Lloyds Banking Group and the Government’s Homes and Communities Agency. They hope to provide around 10,000 homes across the UK within four to five years.
The plan is purchase land from local councils who don’t have the resources to develop it. Using the councils’ local knowledge and recommendations the partnership will build an appropriate mix of houses to rent and buy.
The developers have promised to build a myriad of homes which could also include discounted properties for key workers, disabled people and older people, or discounted homes for sale to help first time buyers.
It’s hoped that the fund could provide as much as 50% affordable housing development.
Councils won’t be forced to sell land on the cheap either, the more homes that will be built for sale by the partnership will warrant a higher land fee. Also, if a local council chooses to have a proportion of homes to rent, it can manage them and keep part of the rent as a source of income, or hand them over to the developers and investors to manage.
John Anderson, executive director of Kier Living, a subsidiary of Kier, said: “Local authorities’ income has been cut significantly and many councils responded by canning development plans because they didn’t have the money to invest in the development of homes.”
He continued: “The fund is not looking for capital gains, but wants to secure long term stable income, and that Kier hoped to grow its business through the new venture. We currently builds around 2,200 homes a year, but wants to increase that to 4,000 homes a year by 2020.