Models Individual Opportunities – Working with Others

A local authority works with a third party – such as a custom build developer, housing association or charitable foundation – to provide serviced building plots on land owned by the local authority or in private ownership. The plots are delivered and sold by the third party (with the principle of planning permission already established) directly to individual private homebuilders. The partner may want to go further than providing plots by offering ‘shell’ homes for individuals to fit out, or other options.

Phases

Initiation

  1. Check your Register for demand
  2. Identify potential partners
  3. Identify suitable land

Planning, design & finance

  1. Ask for and assess a planning application
  2. Consider the use of a Design Code

Ground works

  1. Monitor the works against the planning permission

Home build

  1. Monitor the build out against the planning permission

People

Initiator
Land Owner
Custom Build Developer
Private Homebuilder
 
 
 

Briefing Notes

Demand

Be sure you know the level and type of demand – analyse those on your Register.

Land

This could be council-owned land, but is more likely to be provided by others.Click here to view >

Feasibility

Set out what you want your partners to deliver, but recognise that the sums must stack up.

Planning

Tight or light touch development management? Consider the role of Design Codes and Plot Passports.

Partner

If you plan to work with a partner choose them with care. Recognise that they may need to make a profit. Try to select someone that can deliver the type of plots there is most local demand for, and at the prices people can afford. Once selected the marketing, sales and infrastructure works will be down to them. Seek an arrangement where you share any profit.

Monitoring

The partner is responsible for the building work, but you may need to monitor progress.

Monitoring

The partner is responsible for the building work, but you may need to monitor progress.

Pros/Cons

PROS

  • There is little risk to the council
  • If you set it up well, you can have significant influence over the development
  • You don’t have to create a team to organise the sales and servicing works

CONS

  • It may be harder to deliver lower cost plots
  • Some partners may fail to deliver, and might then press to build spec homes on the site
  • You will probably get less income from plot sales

Notes

ADAPTING THIS APPROACH

The trick when working with partners to deliver serviced plots is for you to structure the way this is done. You can influence the layout and type of plots that are provided through the planning system; and you can ask your partner to match what they plan to provide with the demand that has been recorded on your Register. Some developers may want to provide mainly larger plots for bigger homes, as this could be more profitable for them. Or they may not market a site proactively, and then argue that it needs to be built out as speculative development. So build in safeguards – spell out the marketing that needs to be done, and by when. Consider introducing penalties if they fail to sell the plots (for example, requiring them to build affordable homes instead). This Toolkit provides lots of information on how to deal with all the issues.

Further Information

You may want to know how councils can directly deliver their own serviced plots– see Briefing Note How to deliver serviced plots or Model Individual Opportunities – Council Initiated.

Case Studies

The model above is generic. In reality every project is different and you may find these Case Studies useful reference points.