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Partnerships, communities and private capital in UK housing

February 1st, 2022

Partnerships, communities and private capital in UK housing

As the UK’s housing challenges continue and there’s increasing drive to build communities that are sustainable in every sense of the word, we talk to Claire Kober, Managing Director, Homes at Pinnacle Group Ltd, about the value of collaboration in the quest for new solutions.

Claire Kober was an advocate for regeneration during her time as leader of Haringey Council. Whilst there, she led a £4bn public/private partnership plan with Lendlease in 2017-18, which would have seen more than 6,000 homes created over a 20-year period. It gave her a deep understanding of the UK housing crisis and the social, economic, and political issues that underpin it, and although the plans didn’t come to fruition, there was much to learn from the experience.

Firstly, social regeneration and improving people’s and communities’ lives for the better cannot happen in a vacuum,” she says. “It’s almost impossible to deliver social regeneration without the catalyst of physical regeneration. Secondly, in the current climate, most councils have neither the skills nor the financial capability to drive development and change at pace, partnership is key. There’s a role for the private sector to bring the finance, the skills, and the insight. If there’s clear understanding and clear alignment, there’s a way forward.”

Although pushback from an organised minority stalled the deal, Kober admits that with the benefit of hindsight, embedding community engagement at an earlier stage could have helped push the scheme forward. “Community engagement becomes much more important, and we’d just not appreciated the power of local residents standing up and saying that this could improve their situation. Instead, we had focused on the technical aspects of the partnership and, actually, it needed to be rooted in community,” she points out.

Over the years since, the sense of community, and its importance to individuals and functional societies, has grown. Past developments where the economic function and physical desirability of homes were under-prioritised, clearly don’t work, she says. And urban planners can’t help but change in response to those failures.

Understanding that individual homes need to operate in the context of a functioning ecosystem, allowing people to bring their cultural and social capital and have access to amenities that make these communities desirable places to live in, that have diversity, must be the key ingredients in new developments. It’s about constructing homes that can cope with the environmental and societal challenges ahead and that can stand the test of time.”

Towards customer-centricity

Sustainability and that sense of environmental and social longevity are areas where perhaps the UK could learn from the experience of other countries, Kober explains. In her role as non-executive director and chair of House by Urban Splash, a JV with Sekisui House, one of the world’s biggest housebuilders.

I suspect we’re probably about 40 years behind the Japanese experience,” she says. “Take Sekisui House, for example, the development process is led by the customer. Homes are designed for how people want to live – not just their preferences for fixtures and fitting, but fundamentally.”

And it’s not just that customer-centricity that’s impressive, she goes on to say. The entire process is rooted in efficiency, innovation, and underpinned by principles of sustainability and a long view. “Assembly lines are robot-driven, and sustainability takes centre stage. The company has already delivered in excess of 40,000 zero carbon homes, for example. And relationships are for years, not just the standard 12-month defect period we so often see in the UK. There’s undoubtedly a huge amount of value we could gain from their experience and insight.”

The scale of the challenges that the UK housing sector faces, and the added pressure that pursuing net zero places on that, calls for radical change. “We still have a housing crisis in this country. We still have a huge gap in affordable housing supply and councils are simply not able to fill that, but neither are traditional housing associations able to deliver at the scale needed.”

Could private equity and private investment help address the need? “Absolutely, as long as they understand the market and get the partnerships right. With councils retaining some control, leading a vision for their place, but partnering to secure finance and to achieve the nuts and bolts of housing delivery, the sector could mobilise different players to deal with the challenges, catalyse action and create solutions.”

It’s a vision of a better future that meets the needs of numerous stakeholders, creates viable communities that are desirable and valued, and that achieves sustainable housing. As Claire concludes, it makes housing “a hugely important and very exciting place to be.”

 

Adam Mahmood
Partner – Cities, Infra & Sustainability
adam.mahmood@draxexecutive.com 

 

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