A form of joint venture between a local authority and a private sector partner, Local Housing Companies can strengthen a council’s position at the heart of house building in their area, create opportunities for investors and development partners and help house builders share the risks involved in development.
Typically the local authority ‘invests’ land in the new company and the private sector provides house building expertise and financial investment that matches the value of the land. The LHC is jointly owned, with both parties sharing the risks and benefits of the development process.
The HCA led a pilot programme for LHCs and while a number of the pilot local authorities told us that market conditions impacted on viability in the short-term, the pilot was successful in helping them to think creatively about using their assets and highlighted the importance of developing commercially viable vehicles with the flexibility to respond to specific local needs. Two local authorities, Newcastle and Sheffield have continued to pursue their Local Housing Company and are in the final stages of establishing local housing delivery vehicles with their preferred development partners.
The pilot also established the LHC concept as a potential vehicle for future housing delivery and in 2010 we mainstreamed the LHC approach alongside our other public-private partnership and joint venture options.