Cornwall Private Developers Forum meeting

Ian Knight

Head of Area

19 October 2012

Introduction

‘It is pretty clear what Government wants to see here.

It is to see more housing, more homes delivered, and

for that in turn to drive economic growth.’ – Bob

Kerslake, Head of Civil Service (October 2012)

Background

Update of HCA progress in

Cornwall

Emerging new initiatives

Other policy development

Market context No. of loans in Q1 2012 down -13% on previous quarter, but up 21% on same

time last year

Housing starts in Q1 2012 down -11% on previous quarter, whilst completions up by 6%

0

10,000

20,000

30,000

40,000

50,000

60,000

Q1

2007

Q3

2007

Q1

2008

Q3

2008

Q1

2009

Q3

2009

Q1

2010

Q3

2010

Q1

2011

Q3

2011

Q1

2012

No

. o

f u

nit

s

-

50,000

100,000

150,000

200,000

250,000

300,000

No

. o

f lo

an

s

Starts Completions Number of loans for house purchase (UK)

Source DCLG/CML

Transactions The real housing market ‘crash’

£0

£20,000

£40,000

£60,000

£80,000

£100,000

£120,000

£140,000

£160,000

£180,000

£200,000

Jan-

06

Apr

-06

Jul-0

6

Oct-0

6

Jan-

07

Apr

-07

Jul-0

7

Oct-0

7

Jan-

08

Apr

-08

Jul-0

8

Oct-0

8

Jan-

09

Apr

-09

Jul-0

9

Oct-0

9

Jan-

10

Apr

-10

Jul-1

0

Oct-1

0

Jan-

11

Apr

-11

Jul-1

1

Oct-1

1

Avera

ge h

ou

se p

rice

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

No

. o

f tr

an

sacti

on

s

No. of transactions Average House Price (£)

First time buyers A declining species?

-

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

1979

1982

1985

1988

1991

1994

1997

2000

2003

2006

2009

2012

Nu

mb

er

of

Lo

an

s

0

10

20

30

40

50

60

70

80

90

100

Lo

an

to

Valu

e r

ati

o (

% a

dvan

ce)

Number of loans LTV ratio (% advance)

Trends in tenure A growing private rented sector…

• ‘Around 1.5 million more young people aged 18–30 will be pushed

towards living in the private rented sector in 2020’ (Joseph Rowntree

Foundation: Housing Options and Solutions for Young People in 2020- June 2012)

• ‘For families on low to middle incomes, private renting becomes

steadily more significant if the economic recovery is weak, growing to

27% in England by 2025.’ (Resolution Foundation/Shelter :Housing in Transition report-

June 2012)

Affordable Housing delivery

National Affordable Housing Programme (08-11) and

Affordable Housing Programme (11-15).

NAHP completions – 129 due in Cornwall 12/13.

AHP providing £19.5m of HCA investment to deliver

1,065 affordable homes in Cornwall.

Of the 1,065 homes, only 137 remain as indicative (ie site

not identified).

Slow start to 12/13, but momentum building.

S106 sites – nil grant delivery

Affordable housing delivery falling outside the AHP

programme (Cornwall’s investment plan for housing)

Affordable Housing delivery

Other programme elements:

– Mortgage Rescue

– Homelessness Change Programme

– Traveller Pitch Funding

– Community-led development

– Empty Homes

(Christian Alliance Housing awarded

£580k to bring 58 empty homes in

Cornwall back into use)

Affordable Housing – new

announcements

£300m additional funding

announced to deliver additional

15,000 affordable homes and bring

extra 5,000 empty properties back

into use in current programme.

May be linked to a new debt-

guarantee scheme to allow

Registered Providers to raise

additional funding capacity via an

aggregator vehicle.

£240m over 5 years to deliver

supported housing for older people

and adults with disabilities.

Will deliver both affordable and

private market provision.

Prospectus will be published shortly

with bids due by mid January 2013.

Care + Support Funding

Get Britain Building Initiative

Loan/Equity investment to

unlock stalled private sector

projects.

GBB Round 1 – Castle Hill,

Lostwithiel- £1.3m loan

delivering 32 homes.

GBB Round 2 – No bids in

Cornwall

First Buy 2 – supporting first time

buyers

£280m additional funding for First

Buy announced, expected to

support 16,500 house sales by

March 2014.

Up to 20% equity loan to

purchasers (funded 50:50 by HCA

and developer) for properties up to

£280k price.

Prospectus issued – bids must be

submitted by 5 November. http://www.homesandcommunities.co.uk/sites/default/

files/our-work/firstbuy2.pdf

Support to boost the private

rented sector

DCLG/Treasury working on

proposals for Guarantee scheme to

support up to £10bn borrowing to

deliver private rented sector

housing.

Link to £200m private rented sector

funding.

Aim is to overcome reluctance of

institutional finance to invest in

PRS.

Accelerated development of

major housing sites

Government interest in unlocking

major scheme of 3/5000 units+.

Partnership approach to

understanding barriers, designing

solutions.

Potential up front infrastructure

investment on a recoverable basis.

HCA – Public land role

Third largest public land holder in

Government (10,000Ha).

Accelerated programme for land

release.

Development Partner Panel – fast

procurement.

Potential widening role in release

of other public sector land.

Utilising asset value to make

projects work.

Strong partnership approach.

S106 sites –renegotiation of

unviable sites

DCLG initiative to revisit S106 deals,

where development is not viable.

Initially working with 20 Councils – Atlas

Consulting (part of HCA) managing the

programme with £0.5m funding to cover

technical fees/mediation advice where

necessary

Initiative may be extended more widely,

where LAs show enthusiasm.

Cornwall Private Developers Forum meeting

Ian Knight

Head of Area

19 October 2012