Magazine article Public Finance

Building Joint Ventures Will Boost Council Funds

Magazine article Public Finance

Building Joint Ventures Will Boost Council Funds

Article excerpt

Councils could stand to generate substantial financial surpluses by setting up local housing companies with developers and registered social landlords, it emerged this week.

Government guidance on the scheme, first floated in July's housing green paper, shows that councils providing sites through the new companies will benefit financially once land values rise after homes are built by either a developer or an RSL.

Fourteen local authorities that offered to pilot the scheme on behalf of regeneration agency English Partnerships are due to set up companies during the next six months.

Duncan Innes, a director at EP, said precise models will vary between authorities but in each case councils will commission homes, either from a company partner or an outside contractor, while retaining an equity stake in the development.

Properties will include shared ownership housing as well as private market homes. 'Over ten to 15 years, a council will make much more money than if it had sold the land up front,' he told Public Finance. …

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