Galliford Try boss says local authorities were ‘fundamental’ to 300,000 homes a year goal
Local authorities must become more hands-on in developing residential schemes if they are to hit government housebuilding targets, according to one of the private sector’s leading developers.
Speaking as the government announced £600m of infrastructure funding for five new developments in England – two of which are being managed by local councils – Stephen Teagle, Galliford Try Partnerships’ chief executive, said local authorities were “fundamental” to achieving ministers’ targets of 300,000 new homes being built every year and had to play a more interventionist role.
Taking a master developer role, as Enfield council has done with the multibillion-pound scheme at Meridian Water (pictured), can help the local authority control the pace and timing of delivery, he said.
“By earmarking a bigger share of the sites for affordable and private rented sector housing, councils can increase the absorption rate on sites they control. Margins are lower but it actually encourages supply.”
Peter George, Enfield’s assistant director of regeneration and planning, said that by doing the upfront work required to remediate the site authorities can package up development opportunities that will be attractive for the private sector.
“It means that private landowners are able to look at their sites and see a viable residential-led proposition where it didn’t exist before,” he added.
And Yolande Barnes, chair of the Bartlett Real Estate Institute at University College London, said there was an increasing alignment between social aims and revenue-generating goals in the development process.
“The only way you create value in real estate is to create value in income streams. Without a prosperous and productive place, you certainly don’t get the social outcomes you are after and won’t get the investment returns you want either. If you create a socially successful place that attracts all sorts of people and gives people jobs, you will create income streams.”
But greater intervention in the property left councils more exposed to the vagaries of the property market, warned Kimberley Grieveson, director of property consultancy Avison Young. “All the complexities that come with big development can erode margins. Compound that with a significant drop in the housing market and before you know it you are in a whole world of problems.”
In addition, she said the level of scrutiny on local authorities from council tax-payers was far more intense than was the case in the private sector, while councils may also lack the capacity to take on the master developer role. “A lot of local authorities are going to have to massively upskill to do this at pace and there is a huge skill shortfall across the industry: to recreate that at scale doesn’t happen overnight.”
But Enfield’s George said it was “not complicated” to bring in experts to help local authorities, adding: “If the private sector was meeting housing need, councils wouldn’t have to bring forward sites in the way they are now doing.”
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