HCA to offer contractors land for housing

The Homes and Communities Agency has announced plan to give contractors the chance to build an initial 500 homes on public land in exchange for an equity share in any development.

The announcement comes as part of a £1.5bn tranche of funding for social housing announced yesterday as part of Gordon Brown’s policy re-launch, Building Britain’s Future.

Bob Kerslake, HCA chief executive, said contractors including Bouygues, Skanska and Wates could take part. He said: “The model is where we go in as an equity partner and put land in as part of the equity.” The land could be that owned by the HCA or owned by other public sector bodies.

“We are looking for a development partner to take a lower level of risk because they are not funding the land upfront but we want them to take a lower rate of return.

“A number have said in the current market: ‘we definitely settle for a situation with less working capital tied up and working in joint partnership with you, but have more security albeit at a lower rate of return.’”

Kerslake added: “You know the sorts of companies that I am talking about – the Bouygues, the Skanskas and the Wates.”

He added: “Public sector landowners of all kinds have expressed interest and the HCA has major land ownings of its own to contribute that will ensure we make rapid progress.”

The HCA will hold workshops with interested parties “this side of the summer,” said Kerslake.

The money, which includes £750m for the National Affordable Housing Programme, £500m more for Kickstart schemes and £250m more for new local authority-led council homes, is to come from a mix of redirected communities department funding and cash from “capital underspend” in other departments during this and next year.