Wolverhampton Partnership Forum Thursday 28 th November 2013

1. Wolverhampton Partnership Forum Thursday 28th November 2013 Housing and its contribution to delivery of the City Strategy Dr Chris Handy Accord Group Chief Executive

2. National Politics

3. The National Politics • Conservatives: • Housing Stimulus Package Sept 2012, additional £300m in capital funding to deliver up to 15,000 affordable homes and bring 5,000 empty homes back into use however lack of any increase in grant funding or clarity on the future of grant funding beyond the current spending review period • Brought forward launch of second phase of Help to Buy • Withdrawal of HB for under 25 year olds • ‘Death of social housing’ • Owner-occupation still more favoured • Lib Dems: • Scepticism about the government’s Help to Buy scheme • Concern over any housing bubble • Labour: • “We’ll have a clear aim that by the end of the parliament Britain will be building 200,000 homes a year, more than at any time in a generation”. Ed Milliband • “Rebuilding Britain Commission” headed by Sir Michael Lyons, looking at measures to increase the annual homebuilding rate to 200,000 by the end of the decade. The commission will attempt to identify sites for new towns and garden cities/eco-towns

4. The National Politics SMF, 2013. The Politics of Housing ‘The abject failure of housing policy is among the biggest challenges facing this country yet it barely gets a mention on the hustings or in any political debate.’ Anthony Hilton, Evening Standard, 28/05/13

5. Challenges

6. Last year 2,500 new homes built, 13,000 since 2004 in the Black Country • Need higher level to meet demand c10,000 per year for next 5 years • Clear gap between demand and new builds • House-building a potential solution to economic success • House building stimulates local and national economies • Creates 2.4 direct jobs and 2.4 indirect jobs per unit (Cambridge & Savills) • Pre-recession housing contributed as much as 20% to the economy • But - now less than 7% The Challenges

7. “A public investment of £1bn - matched by £8bn from housing associations - would build 66,000 shared ownership homes for people on low to middle incomes, create 400,000 jobs and in doing so save the taxpayer £700m in job seekers not to mention the added savings from housing benefit and increased tax revenues.” David Orr Chief Executive, National Housing Federation

8. Reasons for lack of house-building on any significant scale includes low confidence of house-builders • Viability of sites e.g. local land historically used for manufacturing/industry and toxicity issues to manage • Inadequate mortgage finance and options • Build price inflation • Lack of capacity in building sector – factors highlighted in Egan report of 15 years ago have not disappeared • Skilled labour and knowledge disappearing, skills gap widening • Off-site manufacturing still nascent The Challenges • For RPs – new bid round announced but expect to see drop off in 2015 as RPs gear up to new programme • Lack of continuity in programme • ‘Guessing game’ funding approach

9. Welfare reform and impact on benefits • Growing demand for smaller homes • Greater pressure on the social sector v. government reducing spend • Potentially higher number of evictions leading to increasing homelessness • Reforms of health and social care funding: • Diversification – are housing associations moving away from building new homes? Other Challenges • Increasing ageing population in the UK bringing an increased need for health and social care • Some housing problems are being reframed in relation to health in order to access health budgets • Health and housing budgets need much closer alignment and greater collaborative working

10. Growing the Housing MarketA Multi-Agency Approach

11. The Registered Providers • Affordable Homes Programme 2011 - 2015 • Affordable Homes Guarantee Programme, an additional £225 million to support a further 15,000 affordable homes starting by 2015 • New bid round announced • Affordable Rent to Buy scheme with £250m in funding for 2015-16 and £150m in 2016-17 to provide homes for rent that will be sold on in the medium term (sell-on at the 10 year point) with sitting tenants getting first refusal.

12. The Local Authorities - Role • Assess demand and need • ‘Ring-master’ and facilitator • Provider of land • Relationship with HCA • Regulator of private sector landlords and housing conditions • Planning and building controls

13. The Local Authorities • New Homes Bonus encouraging local authorities to grant planning permissions for the building of new houses, in return for additional revenue. • Government matching the Council Tax raised on each newly built home for six years. • But ends 2015. • National Audit Office report, New Homes Bonus, (March 2013) concluded that there “is little evidence that the Bonus had yet made significant changes to local authorities’ behaviour towards increasing housing supply.”

14. The LEPs - Role • Public and private partnerships • Enterprise development role but increasingly overseeing wider funding including housing functions • Supportive of private developers • Working with local authorities and RPs – affordable and social housing

15. The Growing Places Fund • £500m fund launched Nov 2011 to support infrastructure that unblocks housing and economic growth • For local areas to decide priorities for this funding • Single Local Growth Fund • Brings together the Government’s growth related budgets and give Local Enterprise Partnerships responsibility for spending it on the basis of their strategic growth plans. • £2bn over 2015-16; c£1.1bn from transport budgets, £500m from skills and £400m pooled from the New Homes Bonus • Government has committed to providing £2bn a year for the fund in the next six years although there is no detail on how this will be funded beyond 2015-16. The Local Enterprise Partnerships

16. The Get Britain Building Fund • £570m fund to support building firms in need of development finance. The aim is to unlock progress on stalled sites that have planning permission and are otherwise “shovel ready.” • Managed by the HCA - round two bids were opened up to smaller sites following an under-spend after the first bidding round • Public land - Build now, pay later • Government announced an intention to test ’build now, pay later’ techniques to speed up delivery, where house-builders pay for the land after they have started work on the new homes. • NewBuy Guarantee Scheme • New and innovative new build indemnity scheme led by the Home Builders Federation and Council of Mortgage Lenders to provide up to 95% loan to value mortgages for new build properties in England, backed by a housebuilder indemnity fund. The Developers

17. The Home Buyers FirstBuy (closed 31 March 2013) The Government’s FirstBuy scheme, backed by funding of £250m, was announced in the 2011 Budget - 16,500 first-time buyers helped with a £280m extension of the FirstBuy scheme. Help to Buy: equity loan Budget 2013 announced the replacement of the FirstBuy scheme: From 1 April 2013, Help to Buy: equity loan will be opened up to all those who aspire to own a new build home, open for the next three years, providing £3.5 billion of investment, supporting up to 74,000 more home buyers as well as providing a boost to the construction sector. Help to Buy: mortgage guarantee scheme development of a new mortgage guarantee scheme to increase the availability of mortgages on new or existing properties for those with small deposits. Right to Buy April 2012 Government reintroduced a national maximum discount set at £75,000 with the aim of revitalising the Right to Buy for existing secure tenants.

18. Build to Rent • £200 million fund announced 2012 - significantly oversubscribed • Budget 2013 expanded to £1 billion to provide equity or loan finance to support the development finance stage of building new homes for private rent. • 27 June 2013 the Housing Minister announced that the Build to Rent scheme was expected to deliver up to 10,000 new homes with the first contracts due to be signed by the end of July 2013. • Further bidding rounds. The Private Renters Other • Self-build schemes • Community Right to Build • WMBUS • BC LEP housing sub-group, cross-sector

19. Growth of c11% in number of households between 2006 – 2026 • Significant increase in people living alone • 3% increase in population • Target for Wolverhampton to build 13,400 homes • 2,129 additional homes were built during 2006-12 • Need to provide 760 additional homes every year up to 2018 • Wolverhampton Strategic Housing Land Availability Assessment (April 2013) identifies sufficient deliverable housing sites to provide 6,438 homes by 2018, 41% above target. • April 2013 – March 2013 saw 139 starts on site and 157 completions of affordable housing in Wolverhampton (HCA, Housing Statistics Nov 2013) Wolverhampton

20. The Future?An Example

21. Bushbury The Accord Group is currently on site in Bushbury, Wolverhampton building 22 new affordable homes. The homes have been designed by the Accord Group’s expert in-house design team of architects, are being manufactured by the Accord Group’s LoCaL Homes manufacturing hub and are being built on site by the Accord Group’s own construction management team. The development includes training and job opportunities for local people which are sustainable as the team moves to the next local development. The procurement process ensures that we are buying from the local supply chain.

22. Bushbury Our spend is local, helping to support the local economy, we estimate savings to the public purse of c 20% on the completed development and the homes are of superior quality, innovatively designed and locally crafted to the Code for Sustainable Homes levels four, five and six. A localised solution to a national issue. Much more can and must be done.

23. Dr Christopher Handy OBE, Accord Group Chief Executive 0121 500 2334 chris.handy@accordgroup.org.uk @DrChrisHandy facebook.com/accordgroup twitter.com/theaccordgroup