Successful places with homes and jobs

A NATIONAL AGENCYWORKING LOCALLY

Affordable Housing Seminar

East Midlands Councils

Graham Dobbs Head of Area HCA

19 June 2013

Contents Current delivery context

Delivery and 2013 Budget Announcements

Focus on AHP and AHGP

HCA role in Investment, Land, Market Interventions and Regulation

Conclusions

Current delivery context Continued limits on public funding Focus on growth Localism Risk – diversification and complex

environment HCA activity focused on five key

areas:– Affordable housing

– Market interventions

– Public land

– Economic Assets Programme

– Regulation

2012/13 Delivery A strong year of delivery HCA has met or exceeded all core

targets:– 114 ha of previously developed land back

into productive use

– 323,000 sqm of new employment floor space created

– £944m of private sector investment attracted

– Exceeded housing delivery targets: 26,635 completions and 41,142 starts

Support of partners was key New programmes & initiatives are

foundation for strong delivery in 13/14

Budget 2013 Significant new investment channelled

through the HCA– Help to Buy

– Build to Rent

– Affordable Homes Guarantees Programme

Builds on success of existing programmes

Increased Resource but focus on– Returnable Investment

– less on Gap or Grant

Speed of delivery is vital to maximise the impact of this investment on the economy.

2013 Budget announcement - HCA

Programme Budget extra

Impact

Build to Rent £800m Additional due diligence & bidding round 400% increase & extra year to 2015/16

Help to Buy £3.75b New homes purchase programme to 2015/16

Affordable Homes Guarantee

£225m 100% increase to existing programme – extended bidding round & timeline to 2016/17

Local Infrastructure Fund - tbc Move from single initiative for 8 large sites to open bidding round to incl sites >1500 & EZ.

Total £4.775b

Growth in value of capital programmes…

Programmes have doubled in value during the SR

Growth in number of Capital Programmes – CSR2010- Budget 2013

Successful Places with Homes and Jobs

Supporting local growth:Housing, LEPs and Cities

Importance of housing and construction in helping drive economic growth is well recognised

HCA activity supports growth at a local level

Working with Local Enterprise Partnerships and Core Cities that identify housing, land and regeneration as growth priorities, and to develop joint investment models

Supporting the delivery of Enterprise Zones

Supporting local partners bidding for the Regional Growth Fund

Our investment and expertise support local aspirations and deliver economic growth.

Our delivery role:Affordable Homes 2011-15

£4.8bn for up to 170,000 new homes Up to £300m care and Support

Specialised Housing Fund Bringing up to 10,600 empty homes

back into productive use £2.1bn programme of investment in

Decent Homes TPF, Homelessness Change, Mortgage

Rescue Meeting locally identified needs Influencing RP Business Plans –

generating capacity

We are helping to deliver the Government’s ambitions to build up to 170,000 new affordable homes, improve existing homes, and assist first time buyers

Affordable Homes Programme 2011-15

The role of Local Authorities

Articulate a clear vision and ambition for their area. Assets delivery of affordable homes Need continuous and meaningful

ongoing dialogue with providers Nominations to new homes Agreement to conversions and

new supply as ‘affordable’ rent or

Affordable Home ownership Maximise cross subsidy solutions

e.g. land, S106, New Homes Bonus,

HRA etc. Maximise funding opportunities – government initiatives –

flexibility/innovative

Affordable Homes Programme 2011-15

What next…

Continued Contract and Programme Management of Affordable Homes Programme– Quarterly review – delivery certainty, clarity on forecasts, final push for

100% scheme profiles

– Significant emphasis on Starts by September 2013

Prepare for new programmes– Help to Buy – contracting with developers - Underway

– Empty Homes 2 – Announcement 20th June

– Care and Support Specialised Housing – Announcement imminent

– Build to Rent – shortlist announced and due diligence started

– Local Infrastructure Fund – Assessment phase, announcement imminent

– Affordable Homes Guarantees – Due diligence phase

Affordable Homes Guarantees Programme- The Basics

Combined funding up to £450m (£225m Autumn Statement, £225m 2013 Budget) – including London

To deliver up to 30,000 new affordable homes – both Affordable Rent and Shared Ownership

Completion by March 2017 but preferred delivery by 2015

Grant alongside guarantees and asset management flexibilities

Expectation that guarantees will drive good VFM for available grant

Affordable Homes Guarantees Programme- Prospectus and requirements

Bids required for named, firm sites Scheme grant rate (not average payment rate) Registered Providers – classified to the private

sector Schemes must start on site by March 2015 End date for completion March 2017 BUT

significant proportion March 2015 s.106 must be delivered at nil grant Products - Affordable Rent & Affordable Home

Ownership Design and Quality 2007 standards

Affordable Homes Guarantees Programme – Timeframe

Deadline for submission of bids – 21 May 2013

Assessment of bids – May-June

National aggregation & liaison with debt guarantee delivery partner – 26 June – 5 July

HCA Board & Ministerial sign off – Early July 2013

Announcement of allocations – Mid July 2013

Appetite – Those whose AHP allocations were scaled back?

Our delivery role: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

Our delivery role:Land

Bringing surplus public land to market to drive housing growth

HCA land development and disposal plan – land for 14,000 new homes by 2015

Enhanced role for HCA – additional £290m funding announced in Autumn statement

Pioneering ‘Build Now, Pay Later’ approach of deferred payment

Supporting central government in its land disposal

We are using new ways to increase the supply of public land and speed up development

Our delivery role: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

£120m invested and 100,000m2 employment floor space in 12 months since programme established

100 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

Regulation: a challenging environment

Sector is becoming more complex and challenging– Changing mix of funding sources

– Welfare system changes

– Diversification

– For-profit providers

– Bond finance

Regulator needs to keep pace Regulatory Judgements – vast majority

of providers meeting the standards

Conclusions Public finance remains constrained;

complex and challenging operating environment

Housing, land and construction as key drivers of local economic growth

But Budget builds on HCA success of existing programmes – more to come?

Risks and opportunities – needs partnership working by LA/RP/Developers/Govt. Dept. to maximise investment opportunities?

Future programmes ‘Bidding’? Challenge or Opportunity?

We are innovative, flexible and commercial in our approach to delivering public value and responding to challenges.

Keeping in touch homesandcommunities.co.uk

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