Pivotal moment for council house building

UCL’s fourth report on Local Authority Housebuilding paints a detailed picture on the challenges and opportunities for council's building homes. As co-sponsor of the report, we value this process both in the detail it provides and the solutions it advocates to unlock much needed new house building for local communities.

What UCL delivered really did lift the lid on the barriers for councils building homes, and showed we're at a key juncture.

Findings include:

• 79% of councils directly delivering housing in 2023, up from 69% in 2019 and 65% in 2017
• 54% of councils buying back Right to Buy (RTB) properties, up from 40% in 2019
• Councils not involved in direct housebuilding cited a lack of funding, lack of land and lack of expertise as prominent issues
• London boroughs delivering more homes than other parts of England
• 53% of councils say increased costs of retrofitting existing housing, due to fire safety or damp and mould, were impacting plans to deliver new housing.
• Four in 10 authorities are delivering some new housing to Passivhaus or similarly tough energy-efficiency standards, up from 27% in 2021

Challenges in supply

The report recognises that local authorities, and the housing sector generally, are navigating in intense period of change, and the aftermath of the financial turbulence in 2022, coupled with rising interest rates, presents a challenging environment.

While programmes of development are increasing in some areas, inflationary costs in construction remain an issue as some schemes are no longer financially viable and delivery plans reduced as a result, while there's an increase in congested priorities for local authorities, for example between new build and retrofit improvements to existing housing stock.

David speaking at the report launch

For those councils which have committed to larger programmes, delivery teams appear to be seeking a range of methods to continue with delivery despite these challenges. In some cases, there is still a focus on using council land within existing housing estates but elsewhere, car parks, depots, council offices, former schools and other buildings are being used to provide homes.

Councils remain active in using their own companies and joint ventures with housing associations, developers and, in some cases other councils, to provide a range of housing. The report shows the number of joint ventures and companies have reduced as an absolute number since 2021 although for some the level of activity has increased.

Despite higher costs and pressures on land availability, London Boroughs, supported by the Mayor of London’s application of the Affordable Housing Programme are still delivering more homes than other parts of England. In London, the Boroughs can apply for funding for five-year programmes, whereas elsewhere in England affordable housing funding is made available on a scheme-by-scheme basis through Homes England.

It's no surprise to see that homelessness has surged, fuelled by no-fault evictions, and the use of temporary accommodation has reached a 25-year high. Councils are grappling with housing refugees, while at the same time, safety concerns, retrofitting needs, and climate change considerations are also complicating the house building picture.

In this context, it’s no surprise that levels of demand for housing, of all tenures, continues to hugely outstrip supply and this perfect storm of reduced delivery, systemic challenges and ever-increasing demand will see the arrival of housing as a crisis issue that will dominate airwaves in the run-up to the election.

However, while the challenges are acute, the solutions are there too. Overall, 94% of local authorities are engaging with housing provision through at least one method and the range used by councils is gradually increasing.

We’re very much part of this, and two examples spring to mind.

Rugby

In Rugby, we supported the Borough Council on a transformative journey to develop their first Council-built homes in a generation.

While building started last month on the first 100 affordable homes at their Biart Place site, the story is how we collaborated to get to this stage.

Knowing they needed more support and capacity, Rugby turned to our in-house team to accelerate the important pre-construction phase. In turn, we used our expertise in unlocking grant to fund the homes by assisting Rugby in making their first Homes England Affordable Homes Programme 2021-2026 grant application.

This collaboration between Willmott Dixon and the council proved decisive and showed what’s possible by utilising private sector capacity without compromising on control.

Our help in getting funding for Rugby meant that we could then adopt a full-cycle approach by utilising our construction skills to build a development for local people comprising of 60 one and two-bedroomed flats, 20 maisonettes, and 20 two, three, and four-bedroomed houses. These homes are not just bricks and mortar; they represent a promise—a promise to provide modern, energy-efficient living spaces for the members of Rugby’s community.

What does this example show us? Biart Place highlights how, to respond to the constraints UCL has identified, companies like Willmott Dixon are going beyond the traditional role of developer/contractor to provide a blended approach that starts at project inception and continues to full completion.

Traditionally, a contractor would have tendered for fully designed schemes and supported our customers in delivery to a set budget. That role still exists, but is increasingly supplemented with additional consultancy led support. Allowing our teams to supplement and support our customers in designing, funding and delivering their projects.

This to me is a win win. As well as the funding support, our team of internal development/regeneration consultants also supported the council with business case writing, financial appraisal/modelling, and more.

Rotherham

Similarly, collaboration has been key with Rotherham Council, where we accelerated their plans for town centre renewal by building 130 homes across three sites. These homes were delivered for affordable rent, shared ownership and market sale to meet specific council needs.

Again, alongside the construction skills, our development team supported Rotherham by sharing knowledge and expertise on the most appropriate market sale typologies and specification, followed by a full wrap around sales and marketing service. This included setting up a brand called “The Trilogy Collection”, along with website and marketing materials, sales offices, as well as staffing the show room.

The impact was instant. Finished a matter of months ago, two of the three sites are now sold out and we’re down to single digit number of homes left on the final site. Now over 120 families are living in Rotherham town centre.

This is the first time Rotherham Council have delivered new homes in their town centre and the first time they had directly delivered market sale, rather than affordable housing. They unlock a wider regeneration strategy to transform the town centre.

If you want to see collaboration between a council and partner like Willmott Dixon to accelerate new development, I strongly urge you to see what Rotherham have done.

We’re increasingly seeing the importance of local authorities housing teams working collaboratively with their regeneration/development teams. This can be beneficial in areas where market sales values are more challenging, and the local authority direct delivery route enables residential uses where the market is not able to respond.