Last night Haringey cabinet decided not to proceed with its £4bn housing joint venture with Lendlease. Their decision also included establishing a wholly owned company to provide more affordable homes.
Responding to this announcement, Richard Brown, Research Director at Centre for London said:
“Councils across London are showing commitment to building more homes for Londoners – directly or through joint ventures.
“Haringey’s decision to set up a wholly owned company puts an end to months of speculation.
“Haringey will now join the 17 other boroughs who have active wholly-owned development companies. Together these schemes have 12,700 homes in the pipeline for the next five years.
“Boroughs are ready to play a bigger role in delivering housing and making the most of their existing assets.
“Indeed, if every one of London’s 32 boroughs committed to delivering a minimum of 10 per cent of their draft new London Plan target (either directly or through a wholly-owned company), a total of 37,300 homes could be delivered across the next five years, representing 12 per cent of London’s housing target overall.”
Today, Centre for London has published a report which reviewed council-led models of housebuilding across the capital.
The report, Borough Builders, found that 22 boroughs have started to build again, driven by the need to create more housing for all tenures, to meet local needs and to deliver better places while generating a financial return. These existing schemes are already set to deliver 23,600 homes – close to eight per cent of the target for London boroughs over the next five years.
But the real potential is yet to be realised. The report suggests if every one of London’s 32 boroughs committed to delivering a minimum of 10 per cent of their draft new London Plan target (either directly or through a wholly-owned company), a total of 37,300 homes could be delivered across the next five years, representing 12 per cent of London’s housing target overall.
The report also highlights the challenges that prevent councils from increasing their housing delivery to its full potential. These include constraints on borrowing capacity, intra-council barriers and lack of political support, as well as planning and development issues that are also exacerbated by a lack of internal capacity and expertise.
Speaking to councils in the capital, the report argues that boroughs could work together better to share expertise and maximise the number of homes they build, but also argues that policymakers need to do more to support and encourage them to deliver more.
The report therefore calls on:
- The Government to relax the conditions attached to various funding streams and recognise the key role that councils can play in delivering more housing.
- The GLA should, through the existing Public Practice scheme, give more boroughs access to the development staff that they will need as they start building homes again.
- The Mayor should use his funding powers to support the development of partnerships between boroughs at sub-regional level.
- This report focuses on approaches where councils retain a long-term stake in development and that are council-led (either through an in-house team or through a wholly-owned council company) rather than joint ventures in partnership with a private developer or a housing association.
- The review of current borough building activities included a desktop review of wholly-owned council companies and direct delivery initiatives in London, further refining results through a survey which was sent to senior housing officers in the 32 London boroughs in March and April 2018.
- The research has established that 22 boroughs currently have active council-led approaches, meeting 10 per cent of their draft new London Plan targets on average. The potential figure was calculated by applying this 10 per cent average delivery figure against London Plan targets to boroughs that are currently inactive or meeting under 10% of their set targets.
About Centre for London
- Centre for London is the capital’s dedicated think tank. Politically independent and a registered charity, the centre develops new solutions to London’s critical challenges, advocates for a fair and prosperous global city and influences policy and practise.
- This project has been generously supported by Supporting Sponsors Be First, Brick by Brick, London Borough of Harrow, London Borough of Lewisham, London Borough of Southwark.