National Housing Federation - Case study: Hart Homes

Case study: Hart Homes – Watford

Watford Community Housing and Watford Borough Council have formed a joint venture called Hart Homes and are aiming to deliver more than 500 homes over six years.

How many and what sort of homes are being delivered?

Hart Homes has a business plan to deliver 550 dwellings of all tenures, delivered over six years.

The first project was entirely for affordable housing, delivering a 40-bedroomed temporary accommodation facility alongside 36 flats for affordable rent.

The next phase of this development is currently in planning for 86 flats, which is based on the Section 106 planning policy of 35% affordable housing, with the balance for market sale. The proportion of affordable homes may well increase as the project evolves.

How did the partnership get started?

The conversation began at a regular strategic meeting between the two organisations. Watford Borough Council was discussing whether it would establish a housing company and this evolved into a discussion about a formal joint venture.

The partnership in detail

The primary purposes of the partnership are to encourage housing supply, particularly social housing, and to advance the objectives of the council and Watford Community Homes. A key part of this is to ensure that full S106 policy compliance is achieved.

There are two incorporated companies, each of which is equally owned by Watford Community Housing and Watford Borough Council. Hart Homes Ltd is a property holding company and Hart Homes Development LLP is the development company, which deals with all housing for sale and builds any affordable housing property (the separation is predominantly in place for tax efficiency).

Each company has its own business plan and governance structure, thereby ensuring clear oversight by each of the co-sponsors. The council shares are held partly by the council and partly through a subsidiary, Watford Commercial Services Ltd. Watford Community Housing’s shares are held by Clarendon Living Ltd, a wholly-owned subsidiary.

The process took twelve months, however partners held fortnightly meetings of senior decision-makers which had the dual benefit of ensuring that issues were both aired and addressed in a timely way, plus genuine relationships were built up which aided in the delivery of the aims.

What have been the greatest benefits and what challenges has the group experienced along the way?

The potential benefits identified at the outset were the ability to access funds, assets, skills and experience, all of which have been realised.
The added dimension has been the strengthening of the wider relationships which has increased cooperation and appreciation of each other’s priorities and allowed open dialogue to influence moving forward on all housing fronts, not just the joint venture outputs.

Much of the collaborative attitude was generated in the early days pre-incorporation, when the senior teams spent a lot of time together.
The biggest challenge was early buy-in to the concepts of the joint venture and this was largely overcome by clear direction from board and council members, followed by the attention to detail in the working group which generated the ability to have frank exchanges without derailing the process.

What would be the group's message to other housing associations and local authorities looking to do something similar?

Be very clear on what you want the partnership to achieve. Preferably have the initial project in mind – with Hart Homes, we worked up the first project, including obtaining planning and procuring the main contractor, before final incorporation of the companies.

Be prepared to invest time and resource in building the team and putting the necessary structure and accompanying documentation in place.