With access to housing reaching crisis point, housing companies can offer a credible alternative to deliver social housing.
Many councils are interested in setting up housing companies
A recent survey by a regeneration firm 3Fox International has revealed that over 50 councils in England had either set up or were thinking of setting up their own housing company. According to the survey, more than two thirds of councils’ were motivated by the need for alternative solutions to provide housing.
Lambeth plan to develop 1,000 homes
Lambeth council has recently announced its plan to set up ‘Homes for Lambeth’ a 100% council-owned company to develop 1,000 new homes. According to Lambeth’s report, a housing company will be better placed to raise finance and to generate surpluses to reinvest in building more homes for local people. Housing companies have greater flexibility to be innovative and can also redirect some of the significant profits being made by housing developers to reinvest in social housing.
Brighton & Hove was one of the first
Brighton & Hove City Council set up a Housing Company: Seaside Community Homes, in 2011. Since then it has raised over £25m for investment in council housing stock and brought 435 empty homes back into use in the process; demonstrating that that Housing Companies have a valuable role to play in meeting housing need.
But are there any drawbacks to setting up a Housing Company?
None that can’t be overcome at present. However, it is important that the business case rationale is well thought through and presented in an appropriate manner.
New housing companies are welcome to the market but there is a concern that announcements of their formation are frequently trumpeted with the claim that they will circumvent Right-to-Buy legislation. The Department of Communities and Local Government (DCLG) is watching these developments closely and claims of side-stepping government policy is likely to lead to the DCLG considering legislation that will remove the freedoms and flexibilities that such Housing Companies currently have.
Seaside Homes was established by Brighton & Hove City Council to refurbish the council’s leased housing stock.
- By using commercial loan finance rather than council funds
- Over 400 council properties renovated
- £3.6m pa saving on nightly booked accommodation to the council
- £15.8m capital receipt paid to the council
- £10m invested in the council’s leased housing stock
