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www.nhh.org.uk
Hertfordshire Housing Conference9 November 2012
Housing and growth
The role housing associations can play in stimulating the local economy
Kevin ThompsonChief Executive
www.nhh.org.uk
What I will cover
National picture What is driving the recoveryThe role construction could playGovernment thinking – stimulus packageThe contribution housing could make
Hertfordshire picture
Hertfordshire housing associations contribution and capacity
The way forward
What is driving the recovery?
Estimated GDP growth by sector to quarter 3 2012
Impact on housing
Construction sector supply chain employs three million people and generates around 13% of GDP
Lowest level of housebuilding for 90 years
Housing represents 12% of construction down from 17%
232,000 new homes needed year on year
114,000 in 2011
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Contribution housebuilding can make
New homes a quick way to boost growth – 330,000 plots already with planning permission (CPRE)
Benefits retained within local economies – jobs, schools, suppliers, local people housed to work in local businesses
Compare High Speed 2 – economic benefits being assessed from 2037.
Impact on investment – attractive, stable, long term
Contribution to finance sector recovery•£10 billion bond financing since 1987•£5.4 billion since the 2008 banking crisis
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Facts and figures
Additional 1% of GDP for every 100,000 homes built
1.5 jobs in construction for every home built
Up to six jobs in the supply chain for every home built
Every £1 spent on construction generates £3 in the wider economy
(source National Housing Federation)
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A practical example
Impact of spending £1 billion on shared ownership properties
66,000 new homes
99, 000 new jobs in construction
396,000 new jobs within supply chain
£15.25 billion generated within the wider economy
(source National Housing Federation)
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Political tide turning
David Cameron “The government is serious about rolling its sleeves up and doing all it can to kick start the economy. (the proposals) provide a comprehensive plan to unleash one of the biggest homebuilding programmes this country has seen in a generation” Nick Clegg“Todays major boost to housing and planning will make it easier to build a home, easier to buy a home and easier to extend a home. A boost that will get Britain building again. Building thousands of affordable homes and generating thousands of new jobs.”
Ed BallsLabour commitment to spending £3 billion on new homes
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Homes for Britain
40 organisations connected withhousing and construction promotinghousing as ‘a driver for growth,mobility and strong communities’
Mark PriskLaunching the campaign at the Conservative party conference “delighted to support this initiative and strongly support the principle of building more homes”
John Cridland, Director General CBI“The single most important thing the government can do to get the economy going is to get housebuilding going. We need the housing equivalent of the Olympics”
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Prime minister’s stimulus package
Announcement 6 September pledged
£40 billion equity guarantee for infrastructure
£10 billion equity guarantee for private and affordable rented housing
Extra £200 million equity finance to stimulate building for rent
Extra £300 million for affordable and empty homes
Planning holiday and Section 106 changes around non-viability
Accelerate the release of public land via the HCA
Additional support for first time buyers
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Prime minister’s stimulus package
In order to
Generate 70,000 new homes including affordable and starter homes
Generate 15,000 new affordable homes
Fast-track the planning process for new development
Support 140,000 jobs in the construction sector
Support investment in new and existing homes
Support the government’s aim of a market led boost for the economy
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Initial response
New money for affordable housingInsufficient detail. Strings attached? Will it be worth it?Expressions of interest only been sought to date Planning relaxationsBacklash of concerns about what might go up?
Section 106Is there slack in the planning system to reduce time taken?Will appeals be any quicker?How many stalled sites will come forward to be renegotiated?
Scrapping S106 entirely resisted for now
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Housing associations in Hertfordshire
Hertfordshire Chief Executive’s Group
Aligned in the Hertfordshire Housing Consortium with local authority heads of housing
B3 Living Housing AssociationHightown Praetorian & Churches Housing AssociationHoward Cottage Housing AssociationNorth Hertfordshire HomesOrigin HousingRiversmead Housing AssociationSouth Anglia HousingThrive HomesWatford Community Housing Trust
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Economic impact in Hertfordshire
Spend in the local economyCollective turnover £290 millionAmount spent on property maintenance £87 millionAmount spent on suppliers £125 millionStaff salaries - largely spent in local economy £63 million
JobsNumber of employees 1,800Number of apprentices and trainees 35
Homes for Hertfordshire workersAffordable homes provided 52,000Proportion of affordable homes in the county 60%Households we house 10%
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Indirect impact on the local economy
Approach to Procurement
Strategies to make it easy for smaller local firms to tender for work•Advertise in Hertfordshire eg Supply Hertfordshire Journal•Buyers events•Toolkit to assist bidding for work•Our own pre-qualification standards as alternative to Constructionline to bid•No minimum turnover - assess risk relevant to type and value of work being sought
OJEU tendering evaluation criteria includes•Commitment to skills and training•Encouragement of local employment•Helping local communities thrive
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Indirect impact on the local economy
Housing the workforceHigh private sector rents 37% rise in last five years – likely to be 27% higher by 2017 on current trends – discouraging modest income workers who drive the economy from settling in high value areas such as Hertfordshire RegenerationRedevelopment of shops, community facilities, improving neighbourhoods – encouraging and retaining investment
Contribution to employment and skillsContribution to Hertfordshire labour market – recycling skilled workersMinimum of £2.9 million on training
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Stimulating supply
Public land release
Easy economic impact for government to release this
Government owns 40% of UK land
Enough government owned brownfield land to build two cities the size of Leicester
Government commitment to stimulate release – little to show
Contribution local authorities can make
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Stimulating supply Certainty
Rents – commitment to current RPI based regime only till 2015
Flexibility on use of assets – to encourage investment in new homes
Government grant? Yes or no.
Chancellor’s Autumn statement
Spending Review 2015