2015 a turning point for housing. Derek Long Director arc 4

Size: px

Start display at page:

Download "2015 a turning point for housing. Derek Long Director arc 4"

Roland Thomas
6 years ago
Views:

1 2015 a turning point for housing Derek Long Director arc 4 derek.long@arc4.co.uk

2 arc 4 A longstanding housing and data consultancy Housing market analysis Private rented sector analysis Affordable Housing Products design Strategy development VFM support Stakeholder engagement Board awaydays and governance support Primary research For registered providers, local authorities, private developers and investors across the UK and the sentient Universe

3 Things could be worse You could have won the election!

4 Agenda England and Austria markets compared England s housing challenges What this means for the North West England s housing sector overview The current system for affordable housing The new system Devo Manc potential good news EIB

8 Housing dashboard

9 UK Housing Challenges Housing for investment so 80% want to own but only 66% can Systemic Market failures 150,000 annual shortfall in new homes Housing shortage mainly in London and South East House prices rose 225% faster than incomes in 2000s London prices twice the English average First time buyer deposits quadrupled to 20% Over-supply (empty homes) in industrial North plus shortage of quality Huge rise in support for rented housing via welfare Regeneration not in Government vocabulary since 2010

10 Mietwohnung in London

11 Mietwohnung in Hull

12 North West Regional Context 195,000 projected shortfall homes by ,000 long term empty homes (Manchester 643) Average house prices ten times average incomes in Trafford Private rents 532 per month = 27% of average income % of working households needing welfare support more than doubled in past six years

13 England s three sector housing system 22.9 million households 63% homeowners Some mainly small-scale private landlords have increased sharply since 2000 Social landlords 50/50 local authorities and housing associations The affordable social rent ecosystem is funded and regulated by the Homes & Communities Agency (HCA) Source ONS Analysis of 2011 Census

14 The current (old) system of funding affordable housing

15 50 year system worked well Government sets national targets and strategy Government gives subsidies to 300 housing associations to build low price homes for rent 192 local authorities set housing strategies Housing associations did regeneration schemes especially in the North

16 Funding a good deal for 50 years HAs annual turnover is 14bn mainly financed from rent which increases by inflation +1% Rent mainly paid in part by Government transfer payments called Housing Benefits Development finance 30% grants allocated through competition by HCA 60-70% commercial loans to HAs paid for by rent 0-10% HAs surpluses or low cost land

17 How does government influence HAs? HAs are: independent, not part of the State non-profit distributing organisations with their own board of directors and policies HAs are regulated by the Homes and Communities Agency (HCA) Standards emphasising Governance and Viability Monitoring of financial health HCA produces policies e.g. for design of homes Government determines annual cap for rent increases

18 Housing Benefit is a target

19 The new system of funding affordable housing

20 Turning Points 2015 Finance Minister Osborne starts a second job

21 A Brave New World? Govt favours private market solutions not housing associations HA rents will be cut 1% a year for 4 years Other benefit cuts will also decrease income E.g. only housing benefits for two children after 2017 HAs forced to sell homes to tenants via Right to buy so a 30 year paid asset can be sold after only 3 years Land and most grants only available for home ownership and market rent no more social rent Support for people to buy homes with cheap loans (at least to start with)

22 Right to Buy voluntary deal 8 days for HAs to avoid law to nationalise them Tenants get up to 77.9k discount on their home Compensation to HAs at current value (not cost of home to HA) NB rental losses before replacement 70% paid to HA on sale 30% on replacement 2 year target for replacing the home. If not replaced Government take back compensation Some older persons homes or rural homes may not be sold but tenants will have portable discount and can buy another property

23 Right to buy deal outcomes millions spent not creating any new homes Permanent net loss of social rented homes very probable short term inevitable Fewer affordable homes will be built New build will be smaller and in poorer areas All HAs will be competing for scarce land which will increase their costs and private prices

24 Devo Manc No formal regional bodies in England so an evolving devolution of powers to partnership of 10 local authorities The combined authority will become lead for investment Manchester Place aims for 300m annual investment = 55,000 new homes by % for market rent, 20% affordable rent Possible that Housing Benefit will be devolved and replaced by HB with conditions Land Use Commission to free up greenbelt land Link with health bodies creates opportunities, but also expect efficiencies/cuts, mergers and centralisation

25 Devo Manc challenges More private rent and affordable rent built how will that impact on HA plans? Will central Manchester s activity attract more investment to outskirts or undercut it? Opportunities for older resident schemes where health and social services resources shrink Could conditional HB be a business opportunity e.g. for your education business? Will cross-manchester JVs, partnerships, mergers be imposed to save costs/increase control?

26 Fragen? Antworten vielleicht!

The use of data in mapping PRS opportunities Helen Brzozowski

The use of data in mapping PRS opportunities Helen Brzozowski Managing Director Helen.brzozowski@arc4.co.uk arc 4 Housing market analysis Private rented sector analysis Affordable Housing Products design