HOMES FOR LAMBETH TO OWN TWO NEW COMPANIES – estate agent gets fee of up to £90,000 to set them up
Two new companies are being set up by Lambeth council’s controversial Homes for Lambeth firm.
The move has been confirmed by a top London property agents.
In a statement to News From Crystal Palace, the agents – Savills – say: “Following a competitive tender the Savills housing consultancy team has been instructed by Lambeth council to advise and support it in the registration of two new companies with the Government’s Homes and Communities Agency (HCA).
“The companies, which will become Registered Providers of Social Housing (RPs), will be owned by Homes for Lambeth, a council owned and run company, which is tasked with facilitating the delivery of new affordable homes within the borough.
“By establishing RPs (registered providers) Lambeth will be able to access additional funding from Government to deliver greater numbers of affordable homes.
“Savills is appointed by Lambeth in an advisory capacity only to support the registration of these companies with the HCA. “It has no involvement in management of any of the housing.”
In its brief to interested parties** Lambeth says a fee target of up to £90,000 (excluding VAT) is envisaged for undertaking the registrations of two companies known as both RPCo and JVCo.
News of the fee of up to £90,000 comes as protesters occupy the Carnegie library in Herne Hill – and revelations that Lambeth council have spent £5,000 on a video about council cutbacks – despite claiming they have no money to fund libraries or repair their estates.
The brief also reveals that Pinsent Masons – Financial Times innovative law firm of the year 2015 – “have provided on-going legal advice to the council on matters concerning HfL and are continuing in this faculty.
And that support has been commissioned from Grant Thornton to “optimise the structure of the HfL (Homes for Lambeth) group of companies. “This will inform the funding and financial strategies, models and business plans for the initial development portfolio and subsequent schemes.”
The interim Homes for Lambeth executive will be primarily comprised of council officers, the brief adds. Deadline for the brief was February 5th.
The brief – which is somewhat technical – says:
The Registered Provider (RPCo), which is wholly owned by TopCo will directly take a transfer of land (by way of long leases granted by the council).
RPCo will enable HfL to directly deploy funding (which can include section 106 receipts) in order to develop and hold affordable and social rented housing, shared ownership, and shared-equity housing.
It is the intention that existing council tenants would be given the opportunity to transfer to tenancies offered by RPCo. The Lollard Street (Kennington), Fenwick (Clapham) and Westbury phase 1 (Wandsworth Road SW8) section 106 sites identified within the Initial Development Portfolio proposed to Cabinet are intended to be owned by RPCo, subject to the requisite approvals.
This will support HfL to generate in income stream into RPCo that can then be re-deployed to progress the development of further affordable and social rented housing.
The joint venture For Profit Registered Provider (JVCo) JVCo will enable HfL to deploy funding in order to develop and hold affordable and social rented housing, shared ownership, and shared-equity housing.
JVCo may also be used to hold housing at market rental levels. Through its exclusive shareholding position in TopCo, Lambeth will hold a non-controlling equity interest in JVCo.
Alongside (but separate to) the process of registering JVCo with the HCA as an RP, the council intends to undertake a process of market testing and appointment of one or more equity partners to invest in this venture as its majority shareholder(s).
Potential partners in JVCo may include Registered Providers, Private Sector parties (including Institutional Investors) or other Public Sector bodies.
This strategy also presents an important opportunity to bring in third party investment, thereby sharing a level of risk within the HfL group and to diversify the overall funding strategy, but it also brings with it key considerations that must (and will) be addressed through the market testing and appointment process, such as the security package sought by the Third Party Investor(s) and the Council’s requirement for all nomination rights.
A key consideration within the process of registering JVCo as a RP will be the implications of the strategy for testing and appointing the majority equity-holding partner(s) in this company upon the process of RP registration with the HCA.
This will be discussed with advisors as a priority in order to understand and manage the potential impact of this strategic intention on the delivery programme for Somerleyton Road.
The brief makes no mention of the Cressingham Gardens estate near Brockwell park or the Central Hill estate, Crystal Palace.
Lambeth council’s own website refers to the following on regeneration:
Central Hill regeneration
Cressingham Gardens regeneration
Estate regeneration in Lambeth
Fenwick estate Clapham regeneration
Knight’s Walk, Cotton Gardens estate, Kennington Lane regeneration
Loughborough Junction Masterplan
Myatts Field North SW9 redevelopment – guide
Our Streets – The Neighbourhood Enhancement Programme
Regeneration activity in Lambeth
South Lambeth Estate regeneration
Vauxhall Nine Elms Battersea (VNEB) regeneration – guide
Westbury Wandsworth Road SW8 regeneration
**Brixton Buzz: Savills scoop lucrative contract from Lambeth council to offer advice on how to register private company for estate regeneration Posted on March 30, 2016 To read full details of the brief please go to third paragraph and click on ‘first advertised’.
Further reading: Facebook Save Westbury estate SW8