One-quarter of developers consider investing in a for-profit provider

The survey showed a growing appetite for strategic partnerships, with 76% of respondents planning to enter one within the next two years, and 87% expecting their peers to do the same. Strategic partnerships around housebuilding generated the most interest, followed by risk-sharing at 54% and funding at 46%.

Richard Tinham, managing partner at Winckworth Sherwood, said: “It’s clear that public funding won’t fix housing provision on its own, and with the current economic climate, strategic partnerships will be central to share risk and resources and provide high-quality homes.”

The report found that strategic partnerships had helped organisations achieve their housebuilding targets, meet their regulatory duties and improve their existing homes.

Partnerships also helped to make larger development sites more viable and helped house builders share risks around high costs, competitive land markets and stagnating sales rates. This was backed by 32% of respondents who said they were looking to enter strategic partnerships to obtain backing from local authorities, and 29% who were keen to enter partnerships to access land.

Mr Tinham added: “Over recent years, partnerships have moved on from the opportunistic to the strategic. The groundwork has been established and the confidence gained for bigger and better deals as we move forward. These can unlock larger sites at speed, create longer development pipelines and provide lasting placemaking benefits.

“There are frustrations around bureaucracy, the right level of government support and the need for shared values. However, new approaches are being formed to help partnerships deliver their aims quickly and successfully. There is also growing optimism that private capital will be attracted to the sector.”

The report provided advice on strengthening the success of these strategic partnerships.

This included aligning values as a non-negotiable priority; structuring partnerships appropriately, with joint ventures where there is genuine equity and shared risk; collaborating early to assess feasibility and optimise resource allocation; and documenting knowledge and interactions in writing. The goal is to retain critical information and ensure it is accessible, regardless of personnel changes.

The findings revealed that more organisations were partnering with larger house builders to achieve certainty, speed and scale. However, smaller house builders have been especially important for small or bespoke schemes, in relation to agility, local insight and innovative approaches.

To overcome barriers to investment, the report said the government must level the regulatory playing field between for-profits and not-for-profits, streamline and clarify private capital engagement processes with local authorities, and recognise and reward capital aligned with ESG (environmental, social and governance) factors committed to social outcomes and not just financial returns.

Mr Tinham added: “As the sector faces ambitious government targets, economic uncertainty and evolving regulatory demands, the collaborative approach of strategic partnerships stands out as a proven way to share risk, pool resources and achieve outcomes that would be unattainable in isolation.

“These partnerships provide a robust framework for overcoming bureaucratic hurdles and ensuring the successful execution of large-scale projects.”

Inside Housing spoke to several for-profit providers in recent months about their ambitions to work with traditional housing associations.

Last month, Catherine Raynsford, managing director of stock acquisitions at financial services firm Legal and General’s affordable housing division, explained her strategy to buy occupied affordable homes from housing associations.

In June, Dominic Curtis, fund manager for the Simply Affordable Homes Fund at Savills Investment Management, discussed how he planned to grow the for-profit and work with housing associations.