Successful places

with homes and jobs

A NATIONAL

AGENCY

WORKING

LOCALLY

HCA Investment

Partner Meeting

North West Update

27 January 2017

Overview

HCA update and recent

Government announcements

(Steve Modric)

SOAHP 2016-21 allocations

and Q4 update (Carl Moore)

Contracting and CME

(Caroline Cormack)

Government and HCA priorities Government

1 million homes by 2020

More homes of all types needed

c£10bn for affordable housing by 2020

Government ready to intervene where markets failing

Housing is a local not national problem

Housing now classed as infrastructure

Housing remains centre stage (Autumn Statement and White Paper)

HCA

New leadership structure in place (right)

New structure and refocused role:

– More active role in shaping markets

– More thematic

Photos - clockwise from top right: Sir Edward Lister (chairman); Nick Walkley (CEO); Danielle

Gillespie (NW General Manager)

HCA in the North West

Danielle Gillespie General Manager, North West

Carl Moore Housing Supply & Home

Ownership

Stuart Sage Public Sector Land

Duncan Inglis Accelerated construction

Locally based teams in Warrington (left) and Manchester (right)

0161 200 6162

01925 644646 0161 200 6130 01925 644627

HCA’s

offer

Help to Buy

Home Building Fund

Land Capacity

Funding

Starter Homes

Housing Zones

Land Commissions

Procurement Panels

Accelerated Construction

Large sites team

HCA site disposals

Releasing surplus

Government land

Developer contacts

Garden Villages

City Deals

Estate Regen

SOAHP 2016-21

Estate Regeneration

New strategy and funding launched 8 December:

– £140m (recoverable) for private sector/RPs (demolition, leaseholder buy-backs, decanting)

– £30m (enabling grant) for LAs & RPs (pre-planning, feasibility studies, masterplanning, viability testing)

– £2m (capacity grant) for LAs (commercial support, legal advice, delivery vehicles)

Easy bidding process via: https://partners.hca-online.org.uk/

Grant funding available on first-come-first-served basis

Further information at https://www.gov.uk/government/publications/estate-regeneration-fund

SOAHP 2016-21 Allocations

(Carl Moore)

National & regional allocations

£1.28bn schemes allocated to in January alongside CME announcement

£2.17bn of £4.7bn SR budget allocated to GLA in November

HCA local allocations determined largely by bidding appetite

North secured 43% initial HCA allocations

c£1.25bn headroom remains for HCA to allocate via CME…

…plus a share of additional £1.4bn announced at Autumn Statement

15%

30%

22%

21%

12%

HCA Funding Requested (£1.28bn)

East and South East (£188m)

Midlands (£382m)

North East, Yorks & Humber (£284m)

North West (£273m)

South and South West (£155m)

North West allocations – by provider Lead Partner Name Sites Units Grant (£)

JV North 31 2758 87,299,567

Great Places 43 1268 34,002,000

Contour 9 721 23,431,000

Accent 7 665 17,854,000

Riverside 19 607 18,199,000

Affinity Sutton 3 355 3,888,105

Southway 11 291 7,356,950

Knowsley Housing Trust 5 232 7,480,726

First Choice Oldham 18 208 5,973,000

Plus Dane 6 192 4,970,000

Together Housing 3 162 6,480,000

Lovell 140 3,920,000

Housing & Care 21 4 136 2,118,000

Kier Group 125 3,500,000

One Vision Housing 2 116 3,285,000

Adactus 113 2,483,000

First Step 111 3,330,000

Countryside 100 2,800,000

Wulvern 4 100 4,134,500

Rochdale Boroughwide 5 99 3,382,000

Manchester Council 75 2,850,000

Places for People 5 74 0

Galliford 1 70 2,100,000

Oldham Council 1 70 1,830,000

Sanctuary 64 2,575,000

Guinness 1 64 1,865,759

Halton Housing Trust 4 62 1,940,000

Isos Housing 2 58 2,390,000

Two Castles 6 56 1,650,000

Home Group Limited 2 50 3,100,000

Magenta 50 1,400,000

Salix 44 1,320,000

City West 8 36 1,080,000

Salvation Army HA 30 1,050,000

Abbeyfield Society 2 23 712,000

Alpha (R.S.L.) Limited 1 19 324,000

J & M Residential 16 636,000

Calico 10 345,000

South Lakes Housing 1 7 245,000

Fairoak HA 6 310,749

Total 204 9383 273,610,356

New North West allocations

Firm, 3422

Indicative, 5961

Allocations by scheme type (firm/indicative)

Affordable Rent, 345

Help to Buy -

Shared Ownership,

5418

Rent to Buy, 2704

Specialist Housing for Rent,

916

Units by tenure (new NW allocations)

Sub-Regional distribution

Distributional allocation of all 9,383 North West homes (firm and

indicative)

Cheshire and

Warrington, 1046

Cumbria, 376

Greater Manchester

, 4302

Lancashire, 774

Liverpool City Region,

1769

North West, 1116

Indicative allocations now

available on regional basis

Appetite for indicative

funding varies:

– C&W (75% indicative)

– GM (66% indicative)

– Lancs (60% indicative)

– LCR (33% indicative)

– Cumbria (25% indicative)

Mapping shared

ownership

allocations (firm schemes by size

& year of completion)

Map shows

location of 450

Shared

Ownership

homes bid

under firm

schemes

Total Liverpool

City Region

allocation:

1,769 homes

(including

indicative and

other tenures)

SOAHP 2016-21: Contracting & CME

(Caroline Cormack)

Summary

Programme Themes

– New funding flexibility

– Supporting Home Ownership

– Supporting Specialist Housing

– Encouraging Construction Innovation

Who Can Bid?

How to Bid

Bid requirements

Assessment

SOAHP contracting

New funding flexibility

Announced by the Chancellor in

the Autumn Statement on 23

November 2016

Funding in the 16-21 SOAHP

available for:

– Shared Ownership

– Rent to Buy

– Affordable Rent

– Specialist Rent (existing named

Specialist Rent budget is not a

cap)

Home Ownership

Home ownership remains the priority for the programme

Help to Buy: Shared Ownership

o Offers prospective home owners the option to buy between 25%

and 75% of their home

o Remaining share owned by the landlord who receives a rent

(should be set at less than 2.75% of unsold equity, must be less

than 3%)

o Home owner can ‘staircase’ in 10% increments until they own the

whole home

Rent to Buy

o Tenant rents on a sub-market Intermediate Rent, with an option to

buy their home once they’ve saved enough for a deposit

o Flexibility for provider at year 5 to sell to the tenant or convert to

private rent or sale, Affordable Rent or keep as Rent to Buy.

Supporting Specialist Housing

Funding is available for new specialist rental homes for

older, disabled or vulnerable people

We are looking for bids which:

o Are supported by local commissioning bodies

o Are well thought through for the client group in terms of

typology, location and design (noting the Housing Our Ageing

Population Panel for Innovation principles and the HCA’s

non-mainstream housing design guidance, both on .GOV.uk)

o Demonstrate an exit plan, should commissioning priorities

change

Specialist Home Ownership development can be bid

through Help to Buy: Shared Ownership

Construction Innovation

Government is keen to encourage innovation in the UK construction sector

We expect increasing quantities of innovative delivery within SOAHP 16-21

The potential advantages in cost and delivery speed match our core criteria of value for money and delivery

We are asking for additional bid information on replicable construction innovation

Who can bid?

16-21 SOAHP CME is open to all Investment Partners and

those who intend to qualify, including Registered Providers,

Local authorities and their ALMOs, House builders and private

sector developers, Community groups, Community Land

Trusts, Co-ops, Almshouses etc.

Rented homes (including for the rental period of Rent to Buy)

may be developed by URBs but the landlord (owner) must be

an RP

Partners can develop in their own right or as part of a

consortium

New providers are encouraged to join existing development

partner consortia

How to Bid

All bidders must have a working IMS account. See Prospectus for contacts.

First time bidders that are not already qualified will need to become a qualified Investment Partner before we can pay grant

Note that there is no requirement to qualify in advance of submitting a bid

IMS guidance and a programme of IMS training is available, aimed in particular at new providers. More information has been published on the SOAHP 16-21 page here https://www.gov.uk/guidance/shared-ownership-and-affordable-housing-programme-2016-to-2021-ims-training-for-bidders

Bid requirements

The 2016-21 SOAHP Prospectus still applies, supported by the CME addendum

Bids are for new supply in England (outside London)

Any requests to use grant (new or recycled) on s106 sites must be demonstrably additional to receive grant: we will give detailed scrutiny to any request

Any scheme where an Affordable Rent is to be charged must be bid into the programme, even where nil grant, and we welcome bids for nil grant schemes of any tenure

For commercial providers we will conduct a due diligence check under our Know Your Customer policy

For Registered Providers we will seek assurance from the regulator on financial standing and that its bid is consistent with continued viability

There is no pre-defined split of funding between geographic areas

All bids must be best and final and independent

Assessment – key points

Quantitative Assessment:

– Value for money (50%)

• Minimising costs

• Maximising other cost contributions

– Deliverability (50%)

• Achievement of planning, land ownership, works contract tendering

• Delivery profile

Qualitative Assessment:

– Affordability and sales risk for shared ownership

– Meeting local needs, design and future-proofing for specialist rent

– Assessment of value for money outliers to review reasons for high costs

16-21 SOAHP contracting

Standard form contracts will be published on our .gov.uk

page shortly

Looks very similar to 15-18 AHP contract

Key updates are to longstop dates; transition deadlines

for indicative bids (outlined in the Prospectus) and to

reflect changes in legislation

Contracting for RPs who have allocations from the initial

bid round is underway

Early delivery (i.e. in 16/17) is being prioritised

Keep in touch

Additional information may be posted on the

SOAHP 2016-21 page on gov.uk and

providers are advised to check regularly:

https://www.gov.uk/government/organisations

/homes-and-communities-agency

Providers can submit queries to

AHPFAQ@hca.gsi.gov.uk

Current Programme – Q4 Update

(Carl Moore)

Key messages for Quarter 4

Prioritising starts: prioritising contracts where in-year opportunities

Highlight opportunities for early CME starts: grant or S106 nil-grant

Brief window to review 17/18 forecasts – will be fixed from April

Year end arrangements (IMS close noon 31 March – reopens 18 April)

Compliance Audit reports: expected issue in May

0% 20% 40% 60% 80% 100%

Expenditure

Starts

Comps

North West programme position – end Dec 2016

Summary

Excellent response from North West providers

Additional funding available to accelerate new supply including

Affordable Rent

Data maps available to support new business opportunities and

mitigate sales risks

Prioritising opportunities for new starts in-year

Refocused HCA team - with continuity and experience