More than 80% of local authorities in England currently own housing companies and the number of councils entering into joint ventures (JVs) is also on the rise, new research has found.
Researchers at University College London (UCL) have found that 83% of councils in England currently have housing companies, compared with 78% in 2019 and 58% in 2017.
The report said the increase in the number of councils building outside of the Housing Revenue Account may be connected to a proliferation in JVs with private sector partners or housing associations to deliver new homes.
The research found that 72% of councils were involved in at least one JV in 2021, compared with 57% in 2019.
Reasons for councils entering into JVs to develop housing include “a wish to share the risk, inject more investment into a project or provide more experience than the council may have”, the report said.
Overall, the report found that council housing companies are being used for a number of purposes, including development, housing management, purchasing Section 106 properties or purchasing street properties for rent.
It said some councils own multiple companies for different purposes, including Epping, South Cambridgeshire, Gateshead and Hounslow.
At the same time, some local authorities have closed down their housing companies recently, including Liverpool and Merton.
Inside Housing reported in January that Merton Council was shutting down its housing company with no homes built due to concerns that rising costs, Brexit and the COVID-19 pandemic had made the business unviable.
The UCL research also found that 80% of councils’ corporate strategies had “some indication of a priority for the provision of affordable housing in their areas”.
“This is across the country, all types of council and within councils of all political control. Where councils are acknowledging this need, they are not necessarily putting in place actions to help to meet this shortfall,” the report said.
“Where councils have not identified affordable housing in their corporate strategies, they are nevertheless taking steps to provide affordable housing.”