Joint venture housebuilding deal agreed

A deal has been agreed between Hammersmith & Fulham (H&F) Council and developer Stanhope Plc to build hundreds of additional new low-cost and family homes in the borough through a 15-year joint venture.

The deal was signed to form a 50:50 joint venture that will see the council and Stanhope jointly take forward housing development opportunities – beginning with the creation of more than 300 homes over the next three years.

Of these 300 new homes, an estimated 40 per cent – approximately 120 – will be affordable intermediate housing sold at a discounted market rate to help local people take their first steps onto the housing ladder.

Two council-owned vacant residential sites in Fulham have already been identified as opportunities to create new homes for this first phase of the joint venture – Watermeadow Court Estate and Edith Summerskill House. The two sites have been empty for many years after being declared unfit for purpose and proving too costly to maintain. On the two sites, roughly double the original number of homes will be re-provided – addressing the local demand for both low-cost home-ownership and market sale properties.

It is expected that one third of the discounted market sale housing would be reserved for families on incomes of up to £30,000pa, one third would be affordable to those with incomes of up to £40,000pa and the remainder would be affordable to those with incomes up to the Mayor of London’s official affordable housing limit of £80,000.

By entering into a joint venture with a private developer, the council is able to benefit from private sector expertise, whilst retaining greater control over what the land is used for and make its housing assets work much harder. Any proceeds made by the council will be ploughed back into even more low cost housing for local residents.

In addition, the joint venture model prevents ‘land-banking’ by developers, which can be the outcome with the traditional kind of disposal arrangements.

The vast majority of existing social housing tenants will not be affected. However, where future opportunities to build new homes occur, the council is committed to ensuring that there is no net loss of existing social housing provision and that current secure council tenants will remain secure council tenants. Social tenants who are on the Home Buy register and live on adjacent estates will have the first opportunity to buy the new discount market sale properties.

The borough’s cabinet member for housing, Cllr Andrew Johnson, said:

“We’ve carefully considered how best to use our land assets more proactively – and firmly believe that joint ventures such as this can accelerate release of public land to help drive forward development, housing supply and economic growth.

“As well as delivering more than 100 low-cost-homes to buy, this partnership will also enable the council to ensure that the proceeds are ploughed back into similar schemes, estate improvements and reducing our £200million of housing debt.”

Critics of the joint venture disagree with the approach, saying that social housing should not be replaced by homes for market sale.

However, the council says that the partnership with Stanhope will enable affordable housebuilding on a scale that would not otherwise be possible.

Approximately 31 per cent of homes in the borough are social rented – well above the London average. However, less than 2 per cent of the borough’s housing is affordable low-cost home-ownership meaning that it is almost impossible for young people to get onto the property ladder unless they are earning a large salary or are sitting on a large inheritance.

H&F Council is determined to bridge the gap, which is why in 2012 it returned to building homes on council land.

There is huge demand for housing in London and, with H&F being the fourth most expensive borough in the country, there are thousands of hard-working, local people who cannot afford to buy their own homes here. To date, more than 6,000 people have approached the council asking for low cost homes to buy.

The council is working hard to secure more affordable homes so local people can fulfill their housing aspirations without leaving the borough.

In addition to the affordable homes in line to be built through the joint venture, H&F Council has also initiated a direct housebuilding programme to build 100 discounted new homes in the next 3 years. This includes our partnership to build the innovative ‘Rational House’ homes, which sees ultra-modern homes built in a factory off-site using pre-made panels. Once finished, they are winched into position in a matter of days before being sold at a discounted market rate to potential first-time buyers on the council’s Home Buy register.