Kier Living, Cheyne Capital and the Housing Growth Partnership have set up a vehicle to help the public sector to build 10,000 new homes.

The New Communities Partnership has £1bn of funding in place to provide local authorities and housing associations with a way to building new homes on their own land, giving them the option to choose between sale, rental or mixed developments.

Traditional developments have delivered an average of 11% of affordable housing over the past three years. Kier claims that its partnership will have scope to offer up to 50% of each site for affordable housing.

Lloyds Bank Commercial Banking will provide banking services and financing solutions to the partnership.

The Housing Growth Partnership (HGP) was established in 2015 as a joint venture between Lloyds Bank and the government’s Homes & Communities Agency, who have each committed an initial £50m to the initiative.  The aim is to invest equity in residential developments through partnering with housebuilders.

Kier Living director John Anderson said: “We are excited by the establishment of this partnership which will focus £1bn of investment into the development of much-needed housing throughout the country. It will bring scale and momentum to Kier’s tried-and-tested mixed-tenure housing delivery model, for public sector clients across the UK who hold land but don’t have the capacity to develop new housing. 

“Through this unique public private sector partnership with experienced finance and development partners Kier, Cheyne and the Housing Growth Partnership, we are collectively offering an end-to-end solution to building much-needed new homes.”

Shamez Alibhai, head of Cheyne’s Social Property Impact Fund, said: “We believe that bringing responsible private capital into the UK housing sector is necessary for tackling the increasing shortfall of genuinely affordable homes across the country. The long-term investment horizon of our socially-conscious institutional investors means that we are able to provide patient capital to work with Kier Living and the HGP in delivering a new socially-inclusive, multi-tenure building model that helps alleviate the current housing crisis.”

Housing Growth Partnership chief executive Andy Hulme added: “The Housing Growth Partnership was formed to address the challenge of housing supply and affordability in Britain today. Working alongside Kier Living and Cheyne Capital through the ‘New Communities Partnership’ should stimulate further growth in residential development projects and enhance access to affordable housing. The alliance will also complement our core purpose to accelerate home building throughout the UK.”