Our advice – when offering consultancy – was always to host your website independently of your web developer. The reason for this was that some developers hosted websites on a box in the corner of their office, whilst others became obstructive to people wishing to change developer (on one occassion even I heard of the developer simply turning off the website hosting when they realised they hadn’t got the job of doing the next version – leaving the customer with no website!)
Independent hosting companies have recently been pushing virtual servers. These allow developers, or resellers, to rent what is effectively their own professionally maintained and connected hosting server for a fraction of the cost of having a dedicated server. (The difference is that a single machine dedicated to one customer is a dedicated server, whereas with a virtual server several customers can share one such machine.)
At WebSainty we have recently rented our own virtual server. This allows us to sell our customers high quality hosting at a good price; whilst also giving us far greater control over the hosting system. Having greater control was of particular importance to us, as tens of customers on independent hosting accounts was becoming difficult to manage!
The advice we give to consultancy customers has also changed to say it is OK to host with your developer as long as they are offering virtual server hosting from an independent professional hosting company. However, our advice that the ‘working relationship’ is one of the key aspects of picking your web developer remains the same!