Contents 3/24/2011. New delivery context. HCA role and remit. Delivering for local communities. HCA in North East, Yorkshire and the Humber

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1 New look HCA funding new affordable housing NHF Building Neighbourhoods David Curtis 25 March 2011 Contents New delivery context HCA role and remit Delivering for local communities HCA in North East, Yorkshire and the Humber 1

2 No. of units m value of loans 3/24/2011 A new delivery context Reduced public funding New priorities and approaches As a result, HCA investment is now focused on 3 key areas: Affordable housing Renewal of existing social housing stock Land and regeneration The HCA is the national housing and regeneration delivery agency for England, helping to enable local authorities and communities to meet the ambition they have for their own areas. Market context Value of gross mortgage lending in Jan 2011 down 13% from previous month 102,570 housing completions in 2010; lowest level since ,000 50,000 40,000 30,000 20,000 10,000 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q ,000 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - Starts Completions Value of mortgage lending 2

3 Market context Downward trend in house prices & affordability ratio has fallen from a peak of 5.86 in Q to 4.47 Q In Q there were 7,900 repossessions, down 11% from Q3 and 26% lower than the same period a year ago UK GDP decreased for the first time in a year, by 0.6% in Q4 2010, compared with an increase of 0.7% in the previous quarter Reshaping HCA for our new role Smaller, leaner and more focussed on where we can add value 6 local area teams London Midlands North East, Yorkshire and The Humber North West South East & East South West 2 corporate directorates Programmes and enabling Finance, legal, HR, IT and corporate assurance Reduction in running costs and offices 3

4 The HCA role: enabling, investment and regulation We are the people who help get things done Working with people and places to enable them to deliver homes, economic growth and jobs Delivering programmes of investment Affordable Homes Programme Decent Homes Backlog Programme Land and regeneration From April 2012 the HCA will become the economic regulator of social housing providers Our enabling role Housing supply, economic growth and jobs are all high priorities for Government but delivery will happen locally HCA working with areas to help realise their ambitions to increase housing supply Using Local Investment Plans to align our work with local growth strategies 4

5 Our investment role: Affordable Homes Programme Funding of 4.5bn ( 2.3bn existing commitments) to deliver up to 150,000 new affordable homes Meeting locally identified needs A more flexible offer for social housing providers and tenants Maximising the delivery of new affordable housing supply Our investment role: New delivery model for affordable rent Affordable rents up to 80% of local market rents Providers have the flexibility to convert properties on re-let to generate additional financial capacity Close collaborative working between HCA, providers and councils Offers to cover a four-year period. Deadline for submission of offers 3 May 2011 Initial contracts signed by July

6 Our investment role: Decent Homes Backlog Programme HCA managing 2.1bn programme of investment 1.6bn to 46 local authorities, including 379m for councils with retained stock 0.5bn for 28 LSVTs Funding will halve the Decent Homes backlog by 2015, supporting the transition to self financing HCA enabling support for councils to achieve quick and cost-effective delivery Our investment role: Land and regeneration Government committed to honouring 1.3bn of HCA and RDA regeneration commitments Using HCA land assets to realise local priorities Working with RDAs and local authorities in preparing local strategies for RDA land and property assets and liabilities 1.4bn Regional Growth Fund will be a key source of support for local private sector led growth and jobs 6

7 Key Budget Headlines 21 new Enterprise Zones Leeds City Region, Sheffield City Region, North Eastern, Tees Valley. FirstBuy scheme - 210m To assist 10,000 first time buyers 10% Government, 10% Private Developer, 5% Buyer Bids May 2011 HCA Build now, pay Later lifeline to house builders Surplus government land Payment for land once all properties are sold More details to follow. Delivering local priorities Central to our new role is combining investment, enabling and land to support delivery of local priorities Investing in new housing and regeneration Proactive enabling support to local partners Utilising surplus public sector land assets and working with government to manage the land and property assets of RDAs Developing the new model for affordable rent with registered housing providers (RPs). From April 2012 the HCA will become the economic regulator of social housing providers 7

8 Local investment planning Local investment plans all completed with partners by March 2011 HCA is working with 160 local partnerships nationally and 23 in the North East, Yorkshire and The Humber Aligning investment in housing and regeneration with emerging Local Enterprise Partnership priorities Engaging Registered Providers in taking forward thematic and spatial priorities Aligning - Investment Land Other funding streams New models and tools eg DPP New Homes Bonus, S106, CIL, Regional Growth Fund Our regulation role Economic regulation of Registered Providers from April 2012 Robust, transparent and independent Command lender confidence, particularly tenants and taxpayers Standards and back stop consumer regulation role Separate board committee 8

9 HCA funding for affordable housing North East, Yorkshire and The Humber m NAHP will deliver 12,900 new homes m (existing commitments) will deliver a further 4,750 homes New delivery model Flexibility to generate additional financial capacity to support new supply Offers to cover a four year period Close collaborative working key Providers Local authorities HCA And Linking up with smaller and community-based organisations Utilising HCA partners Unlocking capacity Utilising potential of conversions New supply proposals need to meet local needs and help deliver local priorities 9

10 The role of Local Authorities Articulate a clear vision and ambition for their area Used to shape delivery of affordable homes Need continuous and meaningful ongoing dialogue with providers Nominations to new homes Affordable Rent The main element of the programme Affordable Rents set at up to 80% gross market rents, service charge inclusive, uprated by RPI + 0.5% for duration of tenancy Minimum 2 year fixed term, flexibility to offer longer tenancies Allocations and nominations based on current arrangement with flexibility to reach local agreements. 10

11 Other options to meet local needs Affordable home ownership where this is a local priority and offers value for money. Funding for social rented housing may be considered in limited circumstances. Other programme elements : Mortgage Rescue Homelessness Change Programme (nee Places for Change) Traveller Pitch Funding Empty homes Programme requirements Open to any provider to submit offers consortia working is strongly encouraged Deadline 3 May 2011 Value for money important for all providers HCA Design and Quality Standards Likely to mean that a provider will need to have existing stock which can be converted; or Access to other resources to minimise the call on HCA funding 11

12 Timetable Publication of the framework inviting offers for the Affordable Homes programme 14 February 2011 Providers developing offers Feb and March 2011 Deadline for submission of offers 3 May 2011 Assessment/negotiation of offers May and June 2011 National aggregation and analysis of programme HCA London Board (London part of proposed programme) and Ministerial and national HCA Board sign off of aggregate programme (subject to provider contracts) 20 June 4 July 2011 W/C 4 July 2011 Initial contracts signed July 2011 Next steps Support local authorities in developing their response to affordable rent Local teams work with LAs, registered providers and developers to ensure affordable rent meets local ambitions and reflects local investment plan priorities Support around housing, tenancies, lettings and allocations, planning and use of land, as well as New Homes Bonus February-March: Local area-based workshops with LAs/ RPs/ DPP to develop understanding of offer and opportunities March-April: preparation May-June: negotiation with RPs on package proposals July: new programme implementation 12

13 Conclusions Spending review has produced a major shift in the way housing and regeneration are delivered Significant challenges and opportunities Pace of policy change Economic context Delivery capacity in private and public sector Working with new paradigm decentralisation, incentives and localism HCA can help local authorities to deliver local priorities homesandcommunities.co.uk 13