Collaboration between private developers and the public sector may be necessary in order to address the UK’s housing needs. In fact, a new partnership named Habiko was recently announced, which will be a £54 million joint venture between Pension Insurance Corporation, Muse and Homes England with the view to deliver 3,000 low-carbon, energy efficient, affordable homes.
There’s significant potential for these partnerships to bear fruit in London. According to Savills, there are around 1,300 sites of more than 20 acres in public ownership across the capital.
Such partnerships harness the strength of both sectors, helping to effectively deliver residential projects that meet community needs while maintaining financial viability. In this article, we’ll look at the benefits and a handful of successful case studies.
Public-Private Partnerships (PPPs) are not necessarily the ultimate solution to the housing crisis. Some have questioned their feasibility, such as Dr Eleanor Woodhouse of UCL. Woodhouse questions whether they are truly cost effective and highlights potential issues when it comes to complex projects.
However, this article isn’t here to provide an analysis of their viability. Instead, we’ll look at why they can work well and cases in which they have been successful.
PPPs allow for the sharing of resources, including land, funding, and expertise. The public sector often provides land or grants, while private developers contribute investment and specialist skills and knowledge - such as a thorough understanding of the market, how to meet community needs, and how to make developments viable.
Combining land ownership can reduce costs and allow for more efficient use of space, boosting capacity and potentially enabling better infrastructure and community facilities.
Sharing financial and operational risks between partners makes projects more manageable and reduces the burden on individual stakeholders. The public sector can transfer risks to the private entity which would otherwise be unmanageable, enabling the resources of both parties to achieve more together than separately. Also note that optimised risk allocation is a key driver of value for money in PPPs.
Public sector involvement helps ensure that developments are aligned with wider social objectives while, as mentioned, private developers have the experience to meet those needs in a viable way. In addition, high quality developments are within easier reach when funds are combined and a cost-effective arrangement can be established.
The Elephant Park development in South London was the result of a partnership between Lendlease, a private developer, and Southwark Council. This regeneration project transformed the former Heygate Estate into a vibrant mixed-use community.
Originally constructed in the 1960s-70s, the estate contained 1,212 homes and featured elevated walkways that connected it with the Aylesbury estate. However, they were not easy to navigate and the area became high in crime.
Development is due to be completed in 2028. Here’s what’s included:
Cranbrook is a new town in Devon being developed by the Exeter and East Devon Growth Point, a partnership involving East Devon District Council, the Homes & Communities Agency, and a range of private sector partners. The first homes were sold in 2012 and development is set to continue until 2031.
The development is taking place in phases. The first phase was to include 20% social rented units, and in subsequent phases, 30% were to be affordable, including a minimum of 10% for social rent.
Plans for Cranbrook include:
In June 2024, approval was granted for Treasbeare, the second expansion area. It will include 1035 new homes, a primary school, a sports area with full size artificial grass and turf pitches, play areas, allotments, a neighbourhood centre, up to 10ha of employment land and five permanent pitches for travellers.
This former brownfield site was transformed into a new waterfront community by Plymouth Council and the English City Fund (ECF), a partnership between Homes England, Legal and General, and Muse. The project introduced the first new marina the city has had in 75 years and was one of Planning Magazine’s top 50 regeneration projects in the UK.
The Millbay development includes:
Another ECF project (in partnership with Salix Homes and Salford City Council), this sustainability focused development was completed in March 2024. It’s part of broader development efforts taking place across central Salford, into which £1 billion is being invested.
The nine-storey building and its premises include:
The London Borough of Lambeth and Cathedral Group collaborated on the development of Clapham One, a sustainability-focused development that includes 22% affordable housing.
The development is situated on what used to be two former sites owned and managed by the local authority, which contained two failing buildings.
£35 million of the project’s funding was from the Homes England Kickstart Programme. Ultimately, it won 12 awards for its architecture, housing design and the quality of its facilities.
Clapham One features:
Collaboration between private developers and the public sector is a powerful tool for delivering sustainable, affordable housing - whether it’s smaller developments like Clapham One or large-scale projects like the new town of Cranbrook.
Shared objectives and resources between private and public entities can potentially lead to quicker progress and more efficient land use. Likewise, shared risk makes such partnerships an attractive option for both parties.
Are PPPs the key to meeting housebuilding targets? Time will tell - but at this stage, it looks like they’ll continue to play an important role.
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