Getting the Midlands building A NATIONAL AGENCY WORKING LOCALLY

Transcription

1 Successful places with homes and jobs A NATIONAL AGENCY WORKING LOCALLY Getting the Midlands building Margaret Allen Homes and Communities Agency Director Programmes & Recoverable Investment 17 October 2013 CiH Annual Midlands Conference

2 Contents Market context Barriers to development Current delivery Looking ahead (2013 SR)

3 No. of units No. of loans Market context Number of loans in England Q up 17% on same time 2012 Midlands housing starts up 47% and completions up1% on Q , ,000 6, ,000 4,500 90,000 3,000 60,000 1,500 30, Starts (Midlands) Completions (Midlands) Number of loans for house purchase (England) Source: DCLG, CML

4 BUT House building is behind household projections (& has been for a generation) 400,000 Housing Completions, England, , ,000 Private Enterprise Housing Associations Local Authorities To meet household projection 250, , , ,000 50, Source: DCLG 4

5 Household projections suggest housing demand will grow most in areas of existing high demand % Household Growth, NORTH EAST NORTH WEST YORKSHIRE AND THE HUMBER EAST MIDLANDS WEST MIDLANDS EAST LONDON SOUTH EAST SOUTH WEST 0% 2% 4% 6% 8% 10% 12% 14% 16% 18% Source: ONS, DCLG 5 Household projections are based on past trends in population and household size. These have been constrained by undersupply of housing, and ignore changing housing preferences and the increasing demand for space relative to income.

6 Barriers to development Competition Costs Supply Chain Delivery

7 2 Cost per ( ) m Build Cost Distribution of costs by size of scheme: all Areas 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, ,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 Size of scheme (m 2 ) ESE Mids NEY&H NW SSW

8 Land - Residential building land prices are more volatile than house prices 4,500,000 Residential Building Land Prices ( /ha), England & Germany, ,000,000 3,500,000 England Germany 3,000,000 2,500,000 2,000,000 1,500,000 1,000, , Residential building land in England = 2.4m/ha Residential building land in Germany = 0.8m/ha Sources: Statistisches Bundesamt, VOA

9 2012/13 Delivery HCA met or exceeded all core targets: National 26,114 affordable housing starts 21,515 completions 7,043 FirstBuy Midlands 6,143 affordable housing starts 4,740 completions 1,876 FirstBuy Support of partners was key New programmes & initiatives are foundation for strong delivery in 13/14

10 Government delivery aims for Current SR (excl London) National Target Delivered 2011/12 Delivered 2012/13 To deliver 2013/15 AHP 57,000 1,932 8,773 46,295 NAHP 44,000 30,437 11,295 2,268 Others 6, ,447 4,482 Total 107,400 32,840 21,515 53,045 Midlands Target Delivered 2011/12 Delivered 2012/13 To deliver 2013/15 AHP 13, ,138 10,839 NAHP 6,851 4,480 1, Total 20,396 5,048 3,938 11,410 NB excl Help to Buy, First Buy and Guarantees

11 Current delivery context Continued funding constraints Focus on growth / stimulus Localism Risk diversification and complex environment Spending Round settlement HCA activity to stimulate housing market: Affordable Housing Products Help to Buy Private Rented provision Interventions to unlock stalled market Public land

12 A range of interventions Affordable Housing Grant Guarantees Assisted Purchase Market Interventions Loan Equity Land Land Build now pay later Loan Equity Grant Economic Assets Loan Equity Grant / Land

13 Budget 2013 Significant new investment through HCA 3.5b Help to Buy Additional 800m Build to Rent Doubling of 225m AHP Guarantees Programme Build on success of existing programmes Help to Buy up and running from April high volume of activity Guarantees. Speed of delivery is vital to maximise the impact of this investment on the economy.

14 SR 2013 Affordable Housing Further investment channelled through the HCA 3.3bn affordable housing funding over 3 years m Affordable Rent to Buy 165,000 homes (incl RtB replacement, nil grant units etc) Dept Health funding - 115m specialist housing; 40m homelessness hostels Lead in period to start of programme Paves way for Regulator to charge fees 10 year rent certainty CPI+1% (convergence)

15 Affordable Housing - products AHP ( ) AHP Guarantee Custom Build Community AHP Care & Support Help to Buy AHP ( ) Affordable Rent to Buy Grange St self build Burton on Trent (Trent & Dove )

16 SR13 - Land SR HCA disposal agency for surplus public sector land Builds on experience of: Bringing surplus public land to market to drive housing growth HCA land development and disposal plan land for 14,000 new homes by 2015 Commercial expertise and complex development experience Pioneering Build Now, Pay Later approach of deferred payment SR Strategic Land review HCA, GPU, Shareholder Executive We are using new ways to increase the supply of public land and speed up development

17 Market Interventions Increasing private sector housing starts through equity loans and other market interventions 1bn Build to Rent 570m Get Britain Building 225m unlocking large scale sites S106 mediation 10bn Guarantees linked to 500m AHP funding for new housing delivery Increasing HCA loan portfolio c. 1bn 3.5bn Help to Buy to support aspiration Black Swan Birmingham BtR

18 Economic Assets Supporting local economic growth through the development of assets A major 700m asset portfolio land, property and joint venture companies Nationally important sites Enterprise Zones 17 local stewardship arrangements 120m invested and 100,000m 2 employment floor space in 12 months since programme established More sites to be disposed in next 12 months We are a key delivery partner in Government s ambition to make the best use of public assets to benefit communities

19 Conclusions Public finance remains constrained; complex and challenging operating environment 2015/16 Spending Round builds on success of existing programmes and pushes the envelope Government push for returnable investment to drive economic recovery and growth Opportunities for new approaches but with risk sharing Housing, land and construction are viewed as key drivers of local economic growth BUT Delivery will be key to sustained confidence in sector investment / support Balfour St - Stoke on Trent We are innovative, flexible and commercial in our approach to delivering public value and responding to challenges.