The South Wests 200811 Affordable Housing Programme

1
The South Wests 2008/11 Affordable Housing
Programme

• Phil Deacon
• April 2008

2
2007/08 Outcome

• Start of Delivered
• year Target
• Expenditure 155.018m 176.554m
• Start on Sites
• Rent 1,675 3,297
• LCHO 600 1,441
• Total 2,275 4,738
• Completions
• Rent 2,781 3,036
• LCHO 1,025 1,670
• Total 3,806 4,706
• Allocation 143.5m 190.6m
• Rent 155.1m (81) (3,673 homes 63))
• LCHO 34.3m (17) (2,068 homes (37))
• Average grant per home
• Rent 42,251

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3,000 ? 4,000 ? 7,500 ? 10,000

• Question
• Are we the HC/HCA, Local Authorities,
  Providers up for, up to, creating seizing the
  opportunities for a step-change?
• Answer
• Too soon to tell .
• .. but NOW would be good

4
The four over-arching criteria

• Deliverability
• Fit with national/regional/local policies
• Quality
• Value for money (HC grant per home)

5
AHP resources

• 711m cash (86 of the Regional Housing Pot)
• Generating an overall programme of 760m
• Remaining to be allocated (Est.)
• 08/09 236m 154m
• 09/10 274m 241m
• 10/11 250m 238m

6
Efficiency targets (annual) aka reductions in
grant-per-home(inc nil-grant schemes)
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Key targets

• Overall outputs from new programme A minimum of
  70 rent
• 15,400 Rent homes 1,989 (13) allocated
• 6,000 LCHO homes 1,513 (25) allocated
• Allocated to date 127m (16) for 16 of output
• But ratio is not right
• Completions in 08/11 Allocated (est.)
• 12,900 Rent completions 5,700 (44)
• 5,700 LCHO (Intermediate) 3,100 (54)
• Immediate challenge of 08/09 3,429 rent and 1,794
  low cost home ownership
• Supported and Older People 10 of rent homes
  Allocated 12
• Larger dwellings (3B Plus) -
• Rent 25 - Allocated 29
• Homebuy 20 - Allocated 19

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Spatial Distribution targets

• Distribution between settlement types
• Strategically significant cities and towns 60-70
  of AHP only 45 allocated (1,319 homes)
• Overall rural (lt 10,000) 4,500 homes
• Small rural (lt3,000) 2,200 homes
• Allocated 437 (15) but will have to increase
• Market towns (3-10,000) 2,300 homes
• Allocated 538 (18)
• (Other Urban Areas 648 homes)
• Distribution between sub-regions
• North 42 35 allocated
• South East 18 15 allocated
• Peninsula 40 50 allocated

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Specific messages (1)

• Tenure balance Rent, Intermediate Rent, Homebuy
  72/28 ratio needed to meet outputs. Met in the
  first round But
• Supported housing/older people
• On track but a lot to do
• Costs
• Older people accommodation size
• Move-on accommodation

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Specific messages (1) cont

• Larger dwellings targets - exceeded rent,
  marginally behind on Homebuy
• Lifetime homes a disappointing 9
• Small flats (1B 1P, lt40m 2 ) - justification
• CSH Level 3 Delivered. Remember very limited
  transition terms - 2,436 homes allocated to
  Level 3 or higher

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Specific messages (2)Homebuy

• New Build Homebuy incomes
• 60 lt25k
• 40 gt 25k
• Measures Average rent on unsold equity is 2.39
  compared to national standard of 2.75 and
  average first tranche sale is 43 compared to 50
  previously
• Keyworkers
• Priority group (after social renters)
• Not a quota
• Marketing
• Standardised definition (KWL)

12
Specific messages (3)

• Completions 08/09
• Still very significant numbers to achieve targets
• Committed programme slippage
• In year delivery challenge to deliver 08/09
  targets. But theres more to come in 09/10 and
  10/11
• Grant per home
• Rent ok for 3 years (42.3K) but 08/09 a major
  challenge (48.1k)
• Homebuy (15.9k) a better picture but a little
  tight for 08/09 (19.5k)
• Impacted on the scale of programme we were able
  to allocate to

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Why?

• Nil grant
• Low proportion of nil grant bids
• Bidders holding back?
• Changes to partnership terms
• S106 schemes
• Strategic sites where are they?
• Cost efficiencies and HA contributions need to
  improve on
• OPS reasonably proportionate to levels
  allocated but need to maximise potential in
  future rounds. Ditto RCGF/DPF

14
Specific messages (4)

• Development pipeline
• engaging between RMEs
• particularly S106 sites
• Impact on spatial distribution
• Growth Support (Affordable Housing) Fund

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Planninga long way to go, to a changing
destination

• Key to our deliverability assessment
• Key to our s106 VFM assessment HC grant is for
  additionality to the nil-grant position
• consistent with local policy,
• validated by economic appraisal
• (demanding but not choking)
• a fair share between Affordable Housing and
  Infrastructure (draws on other funds, not
  gold-plated)
• Thresholds gradients not cliffs

16

• For large/significant schemes
• twin-track S106 HC grant discussions
• Advance signal of HC grant
• Schemes
• Wider area?

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Housing growth is needed, is coming

• Work with us (our money, our expertise) to
  deliver better Affordable Housing outcomes
• Work with us in particular by deploying resources
  in value-adding combinations with ours
• Planning
• Land
• Or well go where the opportunities are

18
Next steps

• Held Seminars and had 11 feedback/dialogue with
  major providers and some LAs.
• Next RME formally opens 14 April and closes 9
  May. Announcements w/c 24 June. Quarterly
  thereafter.
• Regions will set RME priorities in Investment
  Statement.
• Supplementary guidance coming out but NAHP
  prospectus continues to provide framework System
  changes to simplify bidding
• Will continue to seek LA view on proposals

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Issues Risks

• 633m (83) remains to be allocated
• 502m (71) of spend
• 87 of new homes for rent and 75 of homes for
  sale remain to be allocated
• 69 rent and 46 of homes for sale required to
  meet 08/11 completion targets
• Efficiency targets and outputs
• S106 bids
• Zero grant bids
• Major strategic sites
• Other sources of subsidy
• SSCTs and development pipeline
• Significance of next two RME rounds

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Some questions to consider

• Are we ready for the step change?
• What do we need to do to improve delivery?
• How do we speed up the delivery of the regions
  major strategic sites/growth point numbers?
• Can we cost effectively increase our rural
  delivery (lt3000 population) to deliver our share
  of the 10,300 homes target?
• How can we help?