DEVELOPMENT STRATEGY 2015-2020 01 February 2016
HOUSING DEVELOPMENT STRATEGY 2015 2020 1 INTRODUCTION 1.1 This document sets out Stockport Homes strategy for developing and acquiring new homes during the period 2015-2020. 1.2 The strategy is influenced by the Homes and Communities Agency (HCA) 2015-20 second Affordable Homes Programme (AHP 2) the Government s 2015 budget and the Housing and Planning Bill 2015. 1.3 The document also provides an overview of the development successes to date for both Stockport Homes and the Council. 2 BACKGROUND AND CONTEXT 2.1 To date 476 new homes have been built or acquired or are currently on site. This includes properties built for the council by SHL in the role as development agent and for SHL s own property portfolio: See Table 1 below: Table 1 Number SMBC SHL New build for rent 232 78 154 New build for shared ownership 160 33 127 Mortgage Rescue Acquisitions 52 0 52 Empty Property Acquisitions 26 0 26 RTB buy backs 6 0 6 Total: 476 111 365 2.2 The delivery of the above development programme has been made possible by the use of an SHL borrowing facility, borrowing against the HRA headroom and the securing of 15.3m of capital grant funding from the HCA. 2.3 In February 2014 the HCA issued guidance in respect of a second Affordable Homes Programme (AHP 2) as a follow on from the first AHP announced in 2011. AHP2 follows a similar structure to AHP1 with grant levels remaining the same (around 25,000 per unit on average) and the requirement to charge Affordable Rents (80% of market rent). Unlike AHP1 however, there are no restrictions preventing ALMOs from bidding under AHP2.
2.4 In March 2014 SHL submitted a bid for funding through AHP2. The bid envisaged the delivery of schemes on behalf of both SHL and Stockport Council. Schemes to be developed and owned by SHL will be funded via a mixture of HCA grant and prudential borrowing. Schemes to be developed by SHL but owned by Stockport Council will be funded by a mixture of HCA grant and borrowing via the Housing Revenue Account. 2.5 For schemes owned by Stockport Council SHL will continue to act as Development Agent under the terms of the management agreement and will subsequently manage the completed stock. 2.6 In December 2014 allocations were announced and SHL and Stockport Council secured 5.3m in capital grant funding to deliver 266 properties. 2.7 Since the initial allocation under AHP2 the HCA have announced that 700m in grant nationally available through a mechanism of Continuous Market Engagement (CME). The CME mechanism enables HCA partners to submit bids for grant funding on a scheme by scheme basis. 2.8 Table 2 below outlines the schemes which have already received an allocation as part of AHP2, those which have received an allocation as part of the CME mechanism and pipeline developments for which a bid has been submitted but the outcome is as yet unknown: Table 2 AHP2 Allocation Units CME Allocated Units CME Submitted Units New Build for Charles Street 57 Bredbury Curve 31 Rent Drake Court 4 Cross Keys 14 Blackstone Fields 21 St. Thomas 28 Truro Ave. 6 Hopes Carr Ph.3 2 Edwin St. 18 Hexham Cl. 24 New Build for Shared Ownership Bulkely St. 18 Charles Street 56 Bredbury Curve 16 Prospect House 11 St. Thomas 33 Lapwing Lane 10 Hopes Carr Ph.3 15 Blackstone Fields 6 Empty Homes Empty Homes 2 Supported Housing Grafton Street 10 Total: 233 139 10 2.9 It should be noted that grant funding is no longer available for the mortgage rescue initiative, RTB buy backs will be assessed on an individual basis as opportunities arise however these do not attract grant. 2.10 As part of AHP1 grant from the HCA was substantially reduced therefore approval was granted for SHL on behalf of SMBC to convert a number of existing properties from target to affordable rent (80% market rent). As part of the approval limits were applied to conversions in high turnover areas
(Brinnington, Adswood and Offerton) to ensure an even spread across the Borough. The income raised from the conversion of properties was used to bridge the development funding gap brought about by a reduction in grant. As part of AHP1 it was envisaged that 282 properties would need to be converted to deliver the development programme however only 111 conversions were actually needed. In order to deliver the AHP2 programme additional conversions are now required. Therefore, within the period of this strategy SHL will convert the remaining171 properties and will use the income for schemes which require additional subsidy. Demand for this income stream is likely to increase as capital grant funding reduces further or disappears altogether. 2.11 To date there has been little impact on the ability of SHL to let properties on affordable rent levels. 2.12 In addition to schemes developed as part of the AHP2 Stockport Homes are working with private developers on acquiring non-grant funded properties through the developers section 106 planning obligations. Table 3 below outlines section 106 schemes under development or in the pipeline: Table 3 Units Section 106 Schemes New Build for Rent 8 Offerton Park 4 Cherry Tree Hospital 1 Chapel St. Hazel Grove 6 Marple College New Build for Shared Ownership 25 Offerton Park 12 Cherry Tree Hospital 5 Chapel St. Hazel Grove 22 Marple College Total: 83 2.13 A recent announcement by the Prime Minister (October 2015) indicates a shift away from existing section 106 obligations on developers, replaced with a focus on starter homes to be provided by Developers. As a result of this it is likely that Stockport Council will have to review policy in this area which may reduce the number of new affordable homes SHL can acquire through this route. 2.14 Further challenges to continued development were introduced in March 2015 when the chancellor announced in the budget a 1% reduction in rents over the next 4 years. The impact of the chancellor s budget on the development programme is significant in that under the existing SHL financial parameters all pipeline schemes are unviable. 2.15 The sale of high value Council owned stock in Stockport is likely to take during the life of this strategy. A reduction in the supply of affordable housing in Stockport as a result of this policy is likely to increase demand for the provision of new (and all) affordable housing in Stockport. 2.16 In order to continue building new homes and to meet both SHL s and the Council s strategic objectives the financial parameters under which new
development takes place has been amended to extend the borrowing period and bring allowances for maintenance, voids and bad debts more in line with actual expenditure while retaining some prudency. 2.17 The revised financial parameters have been accepted by the Council and were also approved by the Business Development Sub-group on 9th November 2015. The revision to the financial parameters means that all pipeline schemes are now viable. 2.18 On 1 st October 2015 SHL signed a new 27 year management agreement with Stockport Council. As part of this new agreement the memorandum and articles was also amended to allow SHL to deliver new homes for market rent and outright sale providing the opportunity for the business to diversify, compete with private developers and to provide more affordable homes where feasible in place of profit. 3 A DEVOLVED HOUSING MODEL FOR GREATER MANCHESTER 3.1 This strategy is drafted at a time when discussions are starting to take place around a devolved housing model for Greater Manchester. Housing Providers who operate within Greater Manchester are beginning to construct an offer to Greater Manchester Combined Authority and Government which will hit their key targets around growth (home ownership, equity models, rent to buy etc) and private sector rent in return for flexibilities (regulation, rent models, portable discounts on RTB and maintaining a smaller but quality affordable rented offer). 3.2 Discussions are at a very early stage and consensus between housing providers regarding the approach is yet to be reached so it is not possible to draw out any detailed implications for this strategy. However, attention should be drawn to this shifting political landscape within which this strategy is set. 3.3 Proposals and initiatives which could have a significant impact on development activity over the next five years include; A desire to set up a GM spatial framework to meet the significantly increasing need for housing which is predicted. The setting up of a 300 million Housing Investment Fund (HIF) which is being used to unlock solid and viable housing developments by providing a loan facility. This is being targeted at homeownership and private rented development. an acknowledgement that an appropriate housing offer is essential for the continued growth and prosperity of Greater Manchester a major rationale for housing policy interventions will be to reduce dependency social housing is likely to be focussed on those most in need the housing market will be reshaped, guided by a strong devolved strategic framework
housing and public policy will be focused on the development of pathways to home ownership A strengthening of the links between housing and health and how these sectors can work together better to achieve and share savings and efficiency gains 4 STRATEGIC OBJECTIVES AND OUTCOMES 4.1 The development of new homes for existing and new customers to rent and buy will help fulfil the Stockport Homes mission to transform lives. New housing development will also help meet the organisation s aims by: Exceeding customer s expectations in the provision of new quality homes. Supporting customers through effective partnership working with the Council and the HCA to secure grant funding. Creating greener places to live and minimizing SHL s impact on the environment by developing new energy efficient homes. Building new homes within SHL neighbourhoods which will contribute to the development of thriving, safe and sustainable communities and help meet housing need. Involving customers in the development process via consultation and the review of the development design guide to ensure SHL deliver the right product. Making the best use of resources and growing the business by expanding SHL s and the Council s property portfolio. 4.2 This strategy also supports and is influenced by other strategies, policies and plans including the following: HRA Business Plan 30 Year Asset Management Strategy Housing Strategy Housing Needs Assessment Climate Change Strategy Affordable Rent Policy Brinnington, Offerton and the Town Centre regeneration plans. 4.3 While the duration of this strategy follows the timeline set out by the HCA in the 2015 20 Affordable Homes Programme, it is clear that the Governments agenda going forward will see an emphasis on market rent and in particular home ownership rather than support for affordable rented properties. This can be demonstrated by the proposal to extend RTB s to housing association properties and changes to the section 106 planning obligations.
5 HCA AFFORDABLE RENTED AND SHARED OWNERSHIP SCHEMES 5.1 SHL has a good relationship with the HCA due to a strong record of delivering schemes and picking up slippage grant funding which other housing organisations fail to spend. SHL is committed to the provision of new affordable housing which is demonstrated by the strength of the organisation s AHP2 bid and the on-going CME bids. Given SHL s on-going relationship with the HCA and track record of delivery, as long as grant funding is made available for the provision of affordable homes SHL will continue to bid and seek to maximise grant funding opportunities. 5.2 In November 2015 as part of the autumn statement the Chancellor announced that there would continue to be significant capital grant funding for the delivery of new homes for shared ownership. There was however, no such announcement for funding for new affordable rented homes. It is expected that when the new funding prospectus are announced in April 2016 that there will only be grant funding available for specialist rented accommodation such as housing for the elderly and disabled. SHL will seek to pursue grant funding through these routes and is already working up an Extra Care scheme ready to submit a funding bid once the new prospectus is announced. SHL has already submitted a funding bid for a scheme known as Grafton St. for young people with autism. The ability to deliver these schemes will be subject to decisions made by government in relation to exemption from Local Housing Allowance. 5.3 Given the lack of grant funding available for new affordable housing for rent, SHL should examine other avenues for the provision of new housing such as market rented properties and outright sales: 6 MARKET RENTED SCHEMES 6.1 For the first time in 50 years the private rented market has overtaken the social rent sector. According to the 2014 English Housing survey (EHS), in 2012-13 there were a total of 22m households, of which 65% were owner occupiers, 18% were private renters and 17% were social renters. 6.2 The Joseph Rowntree Foundation stated in their report What Will the Housing Market Look like in 2040 that Private renting is projected to grow to house a fifth of the population in England by 2040, with social renting declining to house one in ten. 6.3 Whilst the social housing sector is mainly provided by local authorities and housing associations the private sector is fragmented in its nature. The most recent data from the 2010 Private Landlord Survey indicates that the largest proportion of landlords (78%) own just one property, 17% owning 2-4 properties, 3% owning 5-9 properties, 1% owning 10-24 properties and 1% owning more than 25 properties. It is clear that despite the growth in the private rented sector it remains somewhat of a cottage industry with institutions and registered providers only recently showing an interest in the sector. The graph
below illustrates how England compares with other countries for institutional investment. 6.4 Stockport Borough is similar to England as a whole in that it has a small but growing private market rented sector. The private rented sector has grown to 13% in 2012/13 compared to 9% in 2011 with landlords in general owning one or two properties. There is a predominance of small non professional landlords operating in Stockport. 6.5 The availability of private rented accommodation in the Borough is however following a downward trend with a snapshot in June 2015 showing only 233 units available. This is reflected in the rental price increasing rapidly and in some areas this is now over twice that of social housing rents for comparable properties. Landlords are in a position to select their tenants leading to those claiming housing benefit finding it increasingly hard to find private accommodation. 6.6 The growth in the private rented market and its fragmented nature provides an opportunity for a larger well-organised housing provider to exploit this market. With SHL s proven record in providing excellent management, maintenance, financial and development services in the social and affordable housing sector, the organisation already has the infrastructure in place to move into the private market rented sector. 6.7 In addition in June 2012 Stockport Homes established a Lettings Service which has since grown considerably in reputation with private sector landlords and is a competitive service alongside leading high street letting agents. At present the scheme manages 90 properties on a full management service. Therefore the infrastructure is already in place for the management of new homes let on a market rented basis. 6.8 Stockport will always be SHL s heartland however in order to take advantage of development opportunities the organisation should not restrict
itself to the Borough and should look at developing or acquiring properties where the market is strong. 6.9 It is envisaged that SHL would build up a portfolio of market rented properties through new build and the acquisition of existing properties. Market rented properties would not be eligible for grant and would need to be funded via borrowing at market rates of interest. It is not possible to use prudential borrowing at the interest rate available for affordable housing as this would provide an unfair advantage over competitors and therefore would be classed as state aid. 6.10 Before progressing with any market rented proposals each scheme would be assessed against financial and risk parameters agreed by the board. 6.11 The SHL private rented portfolio would not be designed to make a profit. Once the cost of managing, maintaining, provision of a sinking fund and loan repayments have been covered remaining profit would be used to supplement the loss or reduction in HCA grant to cross subsidise the building of affordable homes. 7 OUTRIGHT SALES DEVELOPMENT 7.1 Despite the recent decline in the number of owner occupiers across England, this remains by far the largest of the housing tenures. Figures from the 2014 English Housing Survey identify 65% of all households as owner occupiers. Current Government housing policy is targeted at increasing the number of owner occupiers which has resulted in the introduction of initiatives such as help to buy, the extension of the Right to Buy for Housing Association tenants and the changes to the section 106 planning obligations discussed earlier. 7.2 During the recession of 2008-10 house prices fell. However, the most recent available house price data (June 2015) released by the Land Registry shows an annual price increase in England and Wales of 5.4 per cent which takes the average property value nationally to 181,619 overtaking the previous peak of 180,983 in November 2007. 7.3 In Stockport, the increase was slightly lower than the national average at 4.4% in the same period with the average price of a house now at just over 156,000. 7.4 Obtaining a mortgage particularly for first time buyers remains difficult with mortgage providers still typically seeking a 10% deposit however the Governments Help to Buy (phase II) scheme is helping potential buyers who are finding it difficult to raise these large deposits. The Local Authority Mortgage Scheme in Stockport is also helping and has seen over 73 households get on the property ladder with the Council providing indemnity worth over 1.6m.
7.5 Table 4 below illustrates number of sales and average price by postcode in Stockport between April and June 2015: Table 4 Source : HM Land Registry Aug 2015 Stockport Housing Market Average Sales Prices by Postcode April June 2015 Detached Semi Terraced Flats/maisonette Average Sales Price No of sales Price No of sales Price No of sales Price No of sales SK1 0 143,293 20 109,327 26 57,714 7 SK2 268,618 18 186,231 49 144,839 27 100,310 10 SK3 299,656 8 160,007 49 122,232 58 101,600 5 SK4 378,013 17 254,975 50 201,971 39 136,318 25 SK5 220,500 3 131,022 29 107,519 37 92,750 4 SK6 335,846 48 195,769 64 170,529 57 105,945 10 SK7 335,846 55 302,532 76 168,258 19 175,912 19 SK8 347,414 69 225,795 110 179,151 52 110,435 23 Total Sales 218 447 315 103 7.6 The number of home repossession orders made in Stockport is relatively low with only 16 orders made in the first quarter of 2015. This trend of low repossession orders is likely to continue as long as record low interest rates remain and lenders are adhering to the pre-action protocol that is required to be followed for anyone falling into arrears. 7.7 Due to the Government s policy to increase the number of owner occupiers, the recovery in the sales market, the predicted continuing loss of stock managed by SHL and the uncertainty over future HCA grant funding, taking all risks into consideration it is proposed that SHL pursue the development of housing for outright sale. 7.8 Under the current management agreement with the council SHL have the authority to develop housing for outright sale. Similar to the proposal to develop properties for market rent it is envisaged that surplus made from this activity would be recycled into the development programme for the building of affordable housing which would make up for the expected reduction or loss of HCA grant. 7.9 Both the development of properties for market rent and outright sale would require separate financial parameters to be agreed by the board. It is also likely that a new legal entity will be required including a separate trading development company acting as a sister organisation to Stockport Homes to take advantage of preferential tax arrangements. Enquiries along these lines are progressing and will require further investigation and agreement with the Board and the Council. 8 SUMMARY OF OUTCOMES AND OBJECTIVES 8.1 As part of this Development Strategy the aim is to achieve the following:
Deliver a minimum of 360 new affordable homes. Acquire a minimum of 2 existing homes through the empty homes programme. Purchase a minimum of 50 new affordable homes from private developers through S106 agreements. Investigate the delivery of an Extra Care scheme for rent, shared ownership and outright sale to meet the needs of Stockport s aging population. Seek other opportunities to acquire or develop properties within and outside of the Borough. Develop and acquire SHL owned homes without grant including affordable or market rented, shared ownership, outright sale and other housing products. Create sustainable homes to meet the housing needs within Stockport and to contribute towards the Council s wider strategic objectives. Carry out option appraisals to existing stock with limited life and consider as an option the potential to demolish and replace with new build. Develop a land banking policy which will enable the organisation to secure new land on the open market. Continue to grow Stockport Homes excellent relationship with partners such as residents, Stockport Council, the HCA, new build contractors and developers. Continue to work with the Council to identify suitable sites for development within the Borough and influence changes to planning policy to help facilitate more development opportunities. Ensure that all development is built in accordance with regulations. Ensure that all new homes are managed and maintained effectively and efficiently. Continue to ensure any new development is financially viable and assessed for risk. Build on the already established positive profile of Stockport Homes as a developer of quality affordable homes delivering value for money whilst meeting the needs of customers. Support wider regeneration activities including the Brinnington and Offerton Master Plans and the Town Centre regeneration plans, including the Covent Garden project. 8.2 To help meet these outcomes and objectives SHL has developed a number of decision making and governance checks, risk and financial parameters and design and quality standards which will continue to be valid for the life of this strategy.
9 THE DECISION MAKING PROCESS AND GOVERNANCE CHECKS 9.1 To ensure that development opportunities are realised and that Stockport Homes can take advantage of grants available from the HCA it is imperative that a streamlined decision making process is in place. This is demonstrated in the chart below: 9.2 The above process can be adopted to ensure opportunities for the development of market rent and outright sales properties can be achieved speedily and efficiently. 10 FINANCIAL PARAMETERS 10.1 In addition to managing individual loans for SHL owned schemes, the financial implications of running a development programme form an integral part of the organisation s HRA business plan assumptions. Taking account of scheme grant and loan projected development is assessed against available cash flow and headroom.
10.2 The Business Development Sub-Group have already approved the financial parameters by which all HCA bids will be made during the duration of the framework and this strategy. All individual projects are currently and will be in the future assessed against the agreed financial parameters. 10.3 Any proposed changes to the agreed financial parameters would need to be approved by the Business Development sub-group. 10.4 As part of the development process a long term net present value style cash flow is prepared which takes into account total scheme costs, grant input and resultant long term loan. Assumptions are built into the cash flow to cover management and maintenance cost, voids, bad debts, loan repayment and rent restructuring. The finance department monitor borrowing across the development programme. Whilst on site, it is the responsibility of the development team member to monitor progress against cash flow and timetable. In the event of any of the following circumstances occurring:- Scheme goes 5% above approved cost (incl. contingency) Contract goes 3% over contract sum Contract runs ten weeks over or 10% of contract period (whichever is the greater) then, a report outlining the reasons and implications for anticipated rents and loans must be submitted to SHMT. 10.5 Parameters relating to any non- grant funded schemes such as market rent and outright sales have yet to be agreed with the Board. 11 RISK 11.1 It is recognised that taking advantage of development opportunities could, if not managed carefully, put the organisation at risk. Key risks associated with housing development are incorporated into the Stockport Homes corporate risk log which together with the pre-determined financial parameters, development procedure and design guide helps mitigate risk. 11.2 Before any scheme can proceed to HCA bid stage SHMT assess each potential development scheme and examines key development risks including financial viability, demand and long-term sustainability. It is for SHMT to agree or disagree with a bid to the HCA for funding. 11.3 A full risk assessment on the development of homes for market rent and outright sales need to be drawn up and agreed with SHMT. 12 SUSTAINABILITY 12.1 Stockport Homes is committed to creating and maintaining sustainable neighbourhoods with balanced mixed incomes and mixed tenures to address polarisation and tackle area inequalities. As part of this commitment the new
build programme will contribute not only by providing housing, but adding value to tackle social, economic and environmental issues within the Borough. 12.2 The quality of the places people live in has an impact on all aspects of life. The development strategy has been developed in the context of creating places and spaces that are sustainable. The design and quality of SHL s new homes will influence how safe customers feel, how easy it is to walk around an area and whether children have access to safe places to play. 12.3 Climate change as a consequence of greenhouse gas emissions is a reality, and there will be effects over the next 30 to 40 years which are unavoidable. As part of the planning and design of new build projects the impact of climate change will have to be carefully considered in the development process. Building and maintaining our homes and neighbourhoods in a sustainable way also meets environmental objectives including cutting greenhouse gas emission. Providing safe, warm and dry homes is fundamental to social inclusion, better health, and reducing fuel poverty. 12.4 In addition to a straight forward site appraisal, Stockport Homes needs to be sure about the long term sustainability of any development project. There needs to be evidence of long term sustainability. The development team work closely with key partners and SHL s housing management team to identify the appropriate mix and tenure on individual sites. 12.5 The on-going implications of the introduction of welfare reform measures and other Governmental decisions will also inform the type and location of new housing. 13 QUALITY AND DESIGN STANDARDS 13.1 Stockport Homes aims to deliver schemes demonstrating excellent design. In addition all projects are delivered to the appropriate design standards, which satisfy and exceed where possible planning and design guidelines as well as those standards as identified within funding partners guidance. 13.2 A Stockport Homes Design Guide has been developed following the setting up of a working group of customers, staff and board members. This is an integral tool for assessing the design and quality of future development schemes. The guide is reviewed in line with each Development Strategy by customers and officers and any significant changes are reported to the appropriate sub-group for approval. 13.3 The standards required as part of the most recent Building Regulations (2015) have now surpassed the standards required as part of the HCA Design and Quality Standards. As a result the HCA no longer requires standards such as the Code for Sustainable Homes to be achieved in order to obtain grant funding.
13.4 In addition to Building Regulations Stockport Homes will ensure that the following is achieved as standard on all building sites: Considerate Constructors all sites will be registered with the Considerate Constructors Scheme and will therefore be monitored to ensure standards are upheld in the categories of environment, cleanliness, good neighbour, respectful, considerate, safe, responsible and accountable. SHL will endeavour to build all specialist housing to category 2 standard (equivalent to Lifetime homes standard) and where possible to category 3 standard. For large sites (more than 30 units) a minimum of 5% of accommodation should be fully wheelchair accessible subject to demand and financial viability. 13.5 Stockport Homes will consider the use of Modern Methods of Construction where it offers value for money. Stockport Homes will also pursue off-site manufacture where savings can be realised, either via a reduction in the contract period or by a reduction in the cost of procurement, without compromising on quality. The repair and maintenance issues related to new methods of construction will be thoroughly examined and researched prior to any adoption taking into account long term implications. 14 WELFARE REFORM & THE HOUSING AND PLANNING BILL 14.1 The introduction of welfare reform and the potential impact on larger properties has raised wider questions about future development plans, both in terms of whether new or acquired larger properties would have sufficient demand. The benefit cap will mean that for many, larger affordable rent properties will be unaffordable and will need to be let to those who are economically active. For those who are economically active pay to stay will impact on those earning greater than 30k. It is important to recognise however that houses built today will have a minimum life of 60 years, in reality these will be much greater, therefore development plans need to take a long term view of housing need in the decades ahead. 14.2 The 30 year asset management strategy looked in some depth at likely housing requirements in the future, and one element of this involved reviewing population predictions for the Borough. This showed that as well as the expected significant rise in the elderly population, there is also an anticipated growth in those aged between 25-39 years by 2029, the group most likely to be bringing up families and needing larger accommodation. This reflects a similar view taken by the Council s 2011 Housing Needs Assessment, which outlines a requirement for 3 and 4 bedroom properties, and asserts that even if no further housing need was to arise in the Borough, it would take 5 years to rehouse those currently seeking such properties. On the other hand welfare reform is going to affect those of working age on benefits with more than two children and the knock on effect of this may be that people choose to have smaller families in the future.
14.3 An additional relevant factor is also the resurgence of right to buy purchases within the Borough and the implications of the introduction of Right to Buy to Housing Associations. During 2014/15, 48 houses and 9 flats were sold under the RTB. Although the details of the introduction of RTB to Housing Associations are yet to be published it is anticipated that SHL will have to sell off its higher value stock as and when it becomes available. With approximately only 400 new units of accommodation being built by SHL over the next few years, it seems likely that the continuation of RTB and the sale of high value stock will lead to a fall in the stock of 3 and 4 bedroom homes. This would then lead to an increase in demand provided that homes are more affordable than in the private sector. 14.4 There is therefore a strong argument for maintaining a balanced approach towards new development, taking local demand factors into account as well as the Council s needs assessment. As a result of the introduction of bedroom tax there has been a growing need for 1 and 2 bed accommodation but the introduction of the benefit cap to single people under 35 will impact on people s ability to afford this type of accommodation. As outlined above there is also a need for 3 and some 4 bed accommodation. By focussing too strongly on building smaller units at the moment, the potential for storing up additional problems around overcrowding in the future is a real possibility. 15 RESOURCES AND PARTNERSHIPS 15.1 The role of the Development team is to identify new development opportunities, bid for grant funding from the HCA and project manage schemes from inception through to the settling of the final account. Professional consultants such as Architects, Employers Agents, Clerks of Work, and Structural Engineers are appointed both in-house and externally. 15.2 Where affordable housing cannot be delivered within a private sector scheme the Council will instead take payment from the developer in the form of a commuted sum. This money is then re-distributed to housing associations who are able to use the money to deliver affordable housing elsewhere in the Borough. The Development team at SHL work up schemes and bid for this grant funding from the Council where possible and where funds are available. 15.3 The provision of in-house Architectural Services has recently been agreed and therefore cost advantages and the development of internal expertise will be further explored over the next few years. 15.4 The development team carry out appraisals of proposed schemes and work closely with finance and housing management staff to ensure that they meet the organisational, financial, sustainability and risk parameters. 15.5 Appropriate staffing levels are monitored to ensure that development schemes can be delivered efficiently. 15.6 Procurement of professional services are made in accordance with policy and where appropriate via a framework to ensure that Stockport Homes
is achieving value for money in these appointments as well as procuring in line with EU regulations. Professional services can also be obtained by tender, quotes or negotiation, it is expected that internal services will be further developed for selected opportunities going forwards. 16 REVIEW AND ACTION PLAN 16.1 The Development Strategy has a clear action plan to assist in the delivery of new homes and acquiring existing properties. 16.2 The outcomes of the strategy and action plan will be monitored by officers and reported to the relevant sub-group on a regular basis. 17 EQUALITY IMPACT ASSESSMENT 17.1 An Equality Impact Assessment has been carried out. The assessment has shown that the approach to the development of new homes for families, young people, the elderly and the disabled is the right focus and reflects the housing needs and demographics of the Borough.