Housing Delivery Models: Investment

Sector leaders call for London debt-and-equity fund & investment education for councils

Investment was the focus of Future of London and GVA’s first roundtable on Housing Delivery Models, supported by BLP Insurance and Lewis Silkin. Anonymised highlights are below; this and sessions on Delivery and Direction will be combined with new GVA research for a November report.


  • Where State Aid and other procurement restrictions aren’t a stopping factor, the best option for public-sector and cross-sector housing delivery is often low-interest prudential borrowing via the Public Works Loan Board (PWLB) – see an interesting FT article here – over private investment, which costs more and can come with as many strings as public borrowing.

That being said, as one participant noted (to nods around the table), public funding still involves too much centralisation, ‘bidding up’ and time-consuming bureaucracy to be truly effective.

  • Politics is one of the top investment risks in public-private investment and delivery models; partly the work involved in addressing opposition or negotiating changes in leadership, and partly the education of private-sector partners.

“Public bodies are under two pressures at the moment: the delivery pressure to build homes and the financial pressure to realise income. Lots of the models are trying to score a lot of goals, but these are often in conflict with each other.”

“If you took a joint venture to its intellectual conclusion, you’d have the partner somehow exposed to the risks associated with temporary accommodation and social care, and all of the things that you have to tackle when you are building homes. The interests [may be] aligned financially; the question is how can you align some of the other interests.”

  • Local authority officers need more investment education, whether they work within the council or in council-owned companies. As noted at the programme outset, while joint ventures and other delivery models are multiplying, councils don’t always make the best choices for their needs and context. Future of London has agreed to work with partners to develop and share guidance.

“Most boroughs are in the process of delivering delivery vehicles, but [many] don’t know what they are doing and don’t have the capability to have well-paced, well-organised operations. This can lock up land and assets and slow development.”

  • Don’t make assumptions about investor appetite: As predicted in FoL’s post-referendum sector briefings, residential development has continued fairly steadily, especially for asset classes like Build to Rent, but investors and developers are taking a more measured look at what’s on offer, especially when it comes to complex delivery models in partnership with the public sector.

“There’s been a distinct upturn in partnering models being offered to market across all sorts of locations and contexts. Investors are increasingly selective about where they focus their time and money, and they’re paying particular attention to how the investment business case hangs together.”

  • London (among others) needs a new and more flexible funding source that can cross-subsidise schemes and models with different value and risk profiles, support mixed-use schemes, etc. Participants proposed a London-focused debt-and-equity fund that might be seeded by central government and possibly with council shares, which housing developers of all types and sizes – including hard-to-fund schemes – could apply for.

“There is no shortage in London of capable builders of homes. There’s not much shortage of capital to build homes either. So the point is if you want to get homes built quickly, keep it simple. The vast bulk of [our] deals have been bulk procurement deals, taking leverage and a share, but avoiding joint ventures.”

One proposed approach was boroughs using their borrowing power to fund schemes brought forward by partners, since well-considered loan contracts “can provide as much control” as full partnerships, and can be simpler and faster to deliver.

To close the session, each participant offered up a best-case housing delivery model. While the list included public-private partnerships and some of London’s biggest deals, people also cited boroughs like LB Hackney “quietly getting on with building homes”; community-led schemes; and ones tied to heritage assets.

Housing Delivery Models – Programme background: 

Cross-sector partnerships are on the rise again in the quest to deliver housing and regeneration more effectively. The emphasis now is on structures that give councils more control and help them retain assets for long-term revenue, but most models, from joint ventures through council-owned companies to new tenures and types, are relatively new; gathering best practice from concept to delivery is difficult at best.

To help, Future of London and GVA, with input from a diverse range of stakeholders and supported by Lewis Silkin and BLP Insurance, are assessing which delivery models are being used across the capital, how they’re performing, and where we go from here. 

The first stocktake was based on an assessment of nine representative London boroughs; that report can be downloaded below. Data for all London local authorities will be released to participants at the 26th Sept roundtable and included in the final report.

Making Delivery Models Work for London – First Stocktake: Download

 Next steps:

Events: Three by-invitation roundtables to gather cross-sector insight, plus launch: 

  • 12th Sept –Investment
  • 26th Sept – Delivery
  • 10th Oct – Direction
  • 21st Nov – Report launch, with stakeholders responding to programme findings


  • Ongoing quantitative research on what models are being used by local authorities, GLA, TfL and related public-sector entities; qualitative research on housing association involvement and alternatives such as land trusts; relevant case studies for both streams
  • A short report, akin to FoL’s Delivering Estate Renewal report, which combines findings from the roundtables, supplementary interviews, qualitative data and two May 2017 Future of London events

If you’d like to be involved, please get in touch: lisa@futureoflondon.org.uk