Laing O’Rourke has teamed up with Legal & General and property management company Touchstone to help councils deliver new build-to-rent housing.
Through the alliance, local authorities will lease their land to L&G, with the investor then funding Laing O’Rourke to build the homes, which will be both affordable and for private rent.
Councils will then lease the homes from L&G, with Touchstone acting as property manager.
It is hoped the model, which the alliance describe as a “one-stop shop”, will help local authorities provide an extra 2,000 homes a year.
The model also allows for the local authority to buy the homes back from L&G at the end of the lease for just £1, meaning town halls could benefit from capital value growth of the properties.
Laing O’Rourke accommodation sector leader Stephen Trusler said: “The crisis in UK housing needs new delivery solutions if we are to start bridging the existing chasm between demand and supply.
“Our aim is for this alliance to make a significant contribution to solving that problem, creating new homes for private rental through innovative partnerships with local authorities up and down the country.”
The development of the model comes in the same week that the Treasury established the Housing & Finance Institute, which has been set up to help councils deliver new housing through a range of potential funding models.
The new body will be led by lawyer Natalie Elphicke who, together with Eastleigh Borough Council leader Keith House, led a Treasury review into how to accelerate new local authority housebuilding.
L&G Property head of public sector partnerships Pete Gladwell said: “The housing shortage is one of the biggest challenges facing the UK, and local authorities are at the sharp end of the issue.
“Nobody can offer an all-conquering solution but we can all do our bit to help meet the challenge.
“What this alliance is trying to do is simple: make accessing quality private sector support as stress-free and financially beneficial as possible for local authorities.
“By bringing our individual industry expertise to the table, we hope to deliver real benefits to councils and the communities they serve.”
Touchstone chief executive Tim Saunders added: “The scale of the UK’s housing problems demands innovative approaches and more collaborative working.
“We believe this alliance can play a part, delivering well-built, well-managed schemes which create long-term value and places where people want to live.”