Pick a target – any target will do.
Whether it’s the government goal of 200,000 homes a year, or 220,000 homes based on the number of new households created, or 250,000-plus modelled by other industry experts and based on the impact of initiatives like Right to Buy, we are woefully short of delivering enough new homes.
In 2015 there were 141,850 completions in England, according to DCLG data.
And this is out of recession with a private market that is developing at pace. But therein lies the problem.
Private vs public
The private sector largely develops in isolation, delivering on average only 11 per cent of affordable housing across private sites in the past three years.
Given the severe and sustained budget cuts faced by local authorities and housing associations, the public sector cannot deliver enough affordable development without support.
This is why Kier, Cheyne Capital, Lloyds Bank and the Homes and Communities Agency have launched the New Communities Partnership: a £1bn fund aiming to deliver 10,000 new homes in conjunction with land-holding public sector clients.
Putting aside headline-grabbing figures, the model is relatively simple and blends Kier’s existing mixed-tenure approach with a socially responsible fund keen to invest in affordable development over the long term.
It’s also a turnkey solution for clients because the collective expertise of the partners spans the lifecycle of homebuilding, from procurement, funding, site assembly and construction to sales, management and maintenance, depending on client needs.
“The public sector cannot deliver enough affordable development without support”
The critical detail is that the public sector client has nomination rights over the tenures and mix of homes that we build, and can focus on as much affordable rental and affordable purchase housing as they feel their communities need.
Depending on any blend of private market and affordable development, there is then also the potential for the public sector client to draw long-term revenue too.
Private & public
The real value of this partnership lies in the funding and the flexibility we can bring. For those local authorities and housing associations that hold land but don’t have the in-house resource, existing capital or long-term funding certainty, this can help them develop the land in ways that would not have been possible working in isolation.
And it’s that client-led and tailored approach that has secured the support of the HCA and Lloyds Bank via their Housing Growth Partnership.
Ultimately we also believe it’s a model others can and should follow.
Pure private development may yield higher margins during market peaks, but the troughs can be tough to navigate.
Partnerships with the public sector enable both sides to gain from each other’s strengths in a long-term sustainable relationship, which also delivers socially responsible development and the homes that our families and communities need.
John Anderson is the executive director of Kier Living