A new study published this month by the Smith Institute, “The Rise of Local Housing Companies” has identified what it describes as a ‘quiet revolution’ in council home building. It estimates that collectively LHCs could deliver up to 15,000 extra homes annually, for sale or rent, by 2022.
This compares with just 2,000 new council homes built in 2016.
The report states the number of LHCs, which are directly funded by councils, has now reached around 150 and could top 200 by 2020. The research also found over half of all the councils in England may soon have a LHC, including many district councils.
Many of the LHCs studied by the Smith Institute use the profits to cross-subsidise new affordable and social rented homes as well as providing temporary housing for the young and elderly.
‘LHCs are spreading like wildfire. At this rate, the majority of councils – of all types and all political colours – will soon have a housing company,’ said Paul Hackett, director of the institute and the report’s author.
‘It’s not a silver bullet to solving the housing crisis, but it will make a difference locally. Surely it makes sense to support these companies, many of whom are providing affordable homes.’
Paul’s report called on the Department for Communities and Local Government (DCLG) and the Local Government Association (LGA) to consider establishing a high-level commission to consider how best to maximise the potential of LHCs as alternative providers of affordable housing.
One of the advantages LHCs offer to councils is that they are free of the rules that constrain the building of social housing. For example, because they are private entities producing private housing they are exempt from Right to Buy and Housing Revenue Account borrowing caps.
LGA chairman Lord Porter welcomed the report and said councils were ‘taking the lead’ when it came to delivering homes. ‘Councils are determined to lead the way in building new homes, and are leading local innovations finding different ways to make this happen,’ he added.
Altair are delighted to have contributed to the report. We have a strong track record in supporting LAs to deliver their local housing companies. Recent clients have included the London Boroughs of Newham, Greenwich, Ealing and Lambeth; South Northamptonshire, Medway and the Isle of Anglesey all of whom feature in the report
We have the experience and expertise covering every aspect from inception to making it an operational reality. This can include:
- Feasibility studies and business case preparation
- Legal structures
- Governance arrangements
- Board member recruitment
- Funding requirements and state aid advice
- Interim executive management
- Business plans and all the necessary financial modeling
- Sensitivity and risk analysis
- Establishing all the usual business infrastructure, including office space, websites, IT, and staffing
- Development management of the new homes themselves.
All of these tasks have been completed successfully by Altair with a practiced and tested methodology.
To discuss how we might support your LHC, please contact Graham Hishmurgh on 07940 569395 or email email@example.com