This local authority/housing association joint venture is an exciting model as it offers a structure for two publically focused organisations, that are natural housing development partners, to come together without a procurement process, enabling increased speed of delivery and certainty.
The project will involve half the homes having rents linked to the National Living Wage. The rest of the homes will be shared ownership, ring-fenced initially for local residents.
Each partner is putting around £60m of equity into the 50:50 limited liability partnership, which is called Homes for the City of Brighton & Hove, and shares cost, risk and reward.
Brighton & Hove City Council’s housing chair Anne Meadows said:
“We would like to thank Bevan Brittan for their valuable help and assistance in helping us to deliver this project.
”This is the biggest commitment to affordable housing in the city for a generation and it’s taken a lot of work to make sure the venture’s business and financial models are robust. There is a huge demand for housing in the city and with the supply of low cost rented homes not keeping pace with demand, we’re having to look at innovative solutions to build much-needed new homes.”
Hyde HA – the group’s parent registered provider – is the investing partner, along with Hyde New Build. The governance arrangement sees 50:50 board representation, with three members from each side.
The JV deliberately did not seek grant funding so it could maintain control over lettings and sales and give flexibility for the investors on the long-term use of the property, given the potential appetite from institutional investors.
Bevan Brittan lead partner Matthew Waters said:
“All sides should be congratulated on signing off this innovative housing delivery project. The two parties bring really complimentary interests and assets to the partnership and together they will have a much greater chance of achieving their shared aim of increased affordable housing in Brighton and Hove.
“The joint venture structure provides a really interesting template for other housing associations and local authorities to follow.”