North Yorkshire Council Advances Major Housing Joint Venture for Yorkshire Coast

North Yorkshire Council is moving forward with an ambitious plan to establish Joint Venture with Lovell Homes to increase housing provision in Scarborough and Whitby.

The proposed joint venture (JV) builds on previous efforts by the former Scarborough Borough Council, which undertook a competitive dialogue process to find a strategic development partner. Lovell was identified as the preferred bidder, having submitted the "most economically advantageous" tender. Lovell was also deemed a "particularly attractive partner" due to their "good history of added social value," including apprenticeships and opportunities for care leavers.

Under the terms of the JV, North Yorkshire Council and Lovell would operate on a 50/50 shared risk and shared reward basis. The Council would contribute land assets to the JV, with Lovell matching the value of the land with development funding. Both members would then be entitled to 50% of the profits generated. Lovell would also act as the development manager and main contractor for the JV for five years, with monitoring requirements and key performance indicators in place to ensure best value.

Boosting Housing Delivery and Social Value The primary purpose of the JV is to support housing delivery, aiming to meet North Yorkshire Council's ambition of ensuring the delivery of 802 new affordable homes per annum, as outlined in its Housing Strategy 2024-2029. The Council also has an overall housing delivery target of 4,126 homes per annum across the county, which the JV is expected to accelerate.

Councillor Simon Myers says the joint venture approach gives the council more control over the type of housing being built.

"All over North Yorkshire, this council owns potential development sites. Traditionally, councils used to simply sell their land holdings, and get a a cash injection.

There are problems with that once you've sold that land, apart from through the planning process , you have very little control over what happens. Land is often sold for a very high price to people and developers then come back to the council and say we can't deliver that amount of affordable housing because it doesn't stack up economically.

And councils in order to see housing delivered on that site, end up sometimes dropping the requirements. And that's one reason. why councils are hesitant about selling development land."

The council says that the JV offers several benefits beyond traditional land disposal, North Yorkshire Council will retain influence over what is delivered on site, including:

• Increased delivery of affordable housing beyond standard planning policy requirements.
• Enhanced quality standards, ensuring homes meet National Described Space Standards, have increased energy efficiency, reduced carbon emissions, and "tenure blind" design.
• Increased development capacity, allowing for more housing delivery than either party could achieve alone.
• Risk sharing and access to private sector expertise in planning, construction, and sales.
• Generation of social value, which Lovell offers through programmes supporting care leavers, ex-veterans, young people, and neurodiverse groups, as well as facilitating upskilling and apprenticeships to address construction industry skill gaps.
• Financial return from land value in the form of profit, which can be reinvested to increase affordable housing, social value, or improve development quality.
• Access to grant funding from bodies like Homes England, potentially amounting to several million pounds.

Councillor Myers says the joint venture approach will enable the authority to achieve the best possible outcomes from the disposal of it's land assets.

"The council gets not only the land value but control of development of the site and the proportion of the profits. Why shouldn't we have a proportion of the profits?

These are public assets and we must get the best we can out of them. And the best we can out of them is two things. One is of course, financial. But there is a great social value to us being involved in the delivery of housing. The opportunities it gives us as a partner to shape the sort of housing that goes in there.

Whether it's the proportion of social housing, what terms and conditions are put on them, whether it's permanent residence. Or a local residency clause or whatever it is we have the opportunity to do those things."

The joint venture project was originally launched by the old Scarborough Borough Council. Councillro Myers says this revised proposal builds onn that work and makes several improvements.

"This is a better proposal than that which was being worked up previously.

I think that it is more balanced in favour of us as the partner. I think that the governance is stronger. I think the costs are cheaper.

The whole management costs have been drastically reduced in this proposal.

I think it does offer great potential for north Yorkshire Council for the delivery of housing, for the realization of assets and for the delivery of social housing, which we all see to be very important given the affordability crisis in North Yorkshire. "

The JV is expected to commence with several indicative initial sites on the Yorkshire Coast.

These include Musham Bank in Eastfield, Sandsend Lane in Whitby, and Rievaulx Road in Whitby. These sites currently comprise open space land, requiring North Yorkshire Council to advertise its intention to dispose of such land and consider any objections before proceeding.

The Council will invest its land assets into the JV, with the value converted into loans upon disposal of sites, based on independently verified Open Market Value. While the Council is not obliged to provide further funding, it has the option to do so.

The Council acknowledges there are a number of development risks, but says it has implemented safeguards. These include securing a base land value for most sites, with the Council not obliged to proceed if this value is not met. Land transfers will be phased, releasing sites only once performance on previous phases has been proven. Long-stop dates will be incorporated into land agreements, allowing the agreement to fall away if certain milestones are not achieved within a set timeframe.

To ensure robust oversight, a Joint Venture Board will be established with three representatives each from North Yorkshire Council and Lovell. An operational board will also be set up, comprising Council officers and Lovell representatives, to review papers and business plans before Joint Venture Board meetings, providing an opportunity for "challenge and scrutiny". The Council is also able to purchase affordable homes developed by the JV, which can reduce financial risk and align with its role as a Registered Provider.