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HCA - Public Sector Land & Development
Jason Essenhigh1 October 2012
Scope of presentation
The HCA’s role
Land asset ‘family tree’
Our assets and their value
Market challenges
The HCA roleWe 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
Making best use of our land and that of government/ other public bodies
Undertaking robust economic regulation of social housing providers
HCA Purpose: to contribute to economic growth by helping communities to realise their aspirations for prosperity and to deliver quality housing that people can afford
Current delivery context
Limited public funding
Localism
HCA investment is focused on 4 key areas:
• Affordable housing
• Renewal of existing social housing stock
• Land and regeneration
• Economic Assets Programme
Focus on growth
Example of HCA’s enabling role:HCA’s Advisory Team for Large (planning) Applications =
Our investment role:Land and regeneration
HCA land development and disposal plan will deliver 11,000 new homes by 2015
Wider use of “Build Now, Pay Later” deferred land payment
Making best use of HCA / other public land
Economic Assets Programme working with LAs to secure local economic development
“We play a key role in Governments ambition to make the best use of public land to benefit communities”
Our role in land
HCA Land
Existing P&R commitments
Accelerated disposal of land
Other government land
Technical support to government departments
Economic Assets Programme
Over 300 sites transferred – value of £300m
Nationally important sites – Enterprise Zones
Local stewardship arrangements
Our role: Delivering local priorities
Investment has to be aligned with local priorities
HCA assists local delivery with the right mix of:
– HCA and other public land assets– Affordable housing / regeneration
investment – Enabling support and tools– Aligning public funding streams
Delivery of local priorities
Enabling support and tools
Regeneration andaffordable
housingLand
Aligning public funding
“We are locally driven. We work with councils, LEPs and other local partners, effectively targeting our investment and support at their identified priorities.”
HCA best value for our land = a balancing act:
• National policy (e.g. accelerated land sales).
• HM Treasury requirements (get “hard cash”).
Versus
•Local(ism) agenda – the aspiration / expectation of the local community and their elected leaders.
• Demonstrating best value for taxpayers.
• HCA’s corporate and business plans (which includes the provision of affordable housing).
• Providing best-outcome for the council tax payer.
• Impact of other Departmental / Section initiatives.
• Build viability / land demand / constraints.
The HCA’s role
Land asset ‘family tree’
Our assets and their value
Market challenges
Urban Regeneration Agency(English Partnerships)
CNT
Development Corporations
EP strategic sites
RDA / LDA
Coalfields RDA / LDA sites
Surplus PSL MoD/NHS/AEA
CNT / DC landholdings
HATs
GLAMK sites
HCA?
£
Industrial Estates Management Corporation
English Industrial Estates Corporation
(English Estates)
The HCA’s role
Land asset ‘family tree’
Our assets and their value
Market challenges
1. IFRS International Accounting Standards
2. HM Treasury FReM
3. RICS Valuation – Professional Standards
4. HCA normative model
Government Financial Reporting Manual (FReM): “….how best to apply the valuation requirements so as to ensure that the statement of financial position gives a true and fair view of the value of the assets at the reporting period”.
HCA AVE 2012
Total number of valuations undertaken 1,891
Number of assets valued at less than £100k 1,137
RDA DATANUMBER OF ASSETS
East South East 57Midlands 53North West 44NE,Y.H 100South/South West 60
Former RDA Commercial Premises (illustrative only)
NumberEast South East 10
Midlands 17
North West 30
NE,Y.H 47South/South West 41
Largest single asset289.6 hectares (Northstowe, South Cambs - housing)
HCA Landholdings
9,243 hectares in total(92.43 sq km / 22,840 acres or 35.7 sq miles)
Most valuable asset37 hectares (prime MK development land)
Huge number of small land strips e.g. nil-ransom verge
The HCA’s role
Land asset ‘family tree’
Our assets and their value
Market challenges……. …….and opportunities to get best consideration?
Acknowledged © PwC - July 2012
Acknowledged © PwC – July 2012
Challenges & Opportunities (PwC Review July 2012)
Challenging market conditions:
Low levels of activity in the housing market.
Ensuring enough houses are built in the right places to satisfy demand.
Restricted access to credit particularly for first time buyers.
Coping with increasing demand for affordable rental properties.
Inter- and intra-generational inequality.
Opportunities • Preparing for medium-term growth opportunities.
• Strategic investment in high home-demand areas.
• Increasing demand for products that provide equity finance for house purchase.
• Using momentum behind planning reform to respond to market signals.
• Policy to make investment in rental a more attractive prospect.
• Using large scale regeneration schemes as an opportunity for investment in rental housing.
• Use housing wealth to address fiscal sustainability problems resulting from an aging population and respond to the challenge of funding long-term care.
• Expanding shared equity models to enable those without wealthy relatives get on the housing ladder.
Unsold sites:Higher cost - site de-risking•Eliminate or mitigate abnormals / contaminants.•Forward-fund utilities / roads / community buildings.•Forward-fund new / renegotiated obligations / S106.
Stalled sites:•Grants (Kickstart / Get Britain Building).•Reduce or delay onerous / costly planning. conditions or community benefits.•Change land payment (build now and pay later).
Tools in the HCA’s box
Lower cost - site de-risking•Obtain planning consent or lock-in existing favourable consent by undertaking qualifying works.•Build now and pay later for the land.
Savills data – Midlands 2012
Acknowledged © Savills 2012
