New look HCA – funding new affordable

housing

David Warburton, Head of Area, HCA

18 March 2011

Contents

• Policy and economic context

• HCA’s role

• Affordable housing and the new

model

• HCA in the South West

A new delivery environment

• Reduced public funding – requires

innovation and a drive for increased

value for money and greater leverage

of private investment

• Land and regeneration – public assets

crucial for creating a pipeline of our

new development opportunities

• Investment into improving existing

stock and regeneration

• A fresh approach to funding new

affordable homes

• HCA - an investment and enabling

agency

Reshaping HCA for our new role

Smaller, leaner and more focused

on where we can add value

Six local area teams:

– London

– Midlands

– North East, Yorkshire and The

Humber

– North West

– South East and East

– South West

Two corporate directorates:

– Programmes and enabling

– Finance, legal, HR, IT and

corporate assurance

Reduction in running costs and

offices

Reshaping HCA for our new role

Four ‘South West’ teams:– Somerset, Devon,

Exe Authorities, Torbay, Plymouth, Cornwall and Isles of Scilly

– West of England, Gloucestershire and Oxfordshire

– Wiltshire, Swindon and Berkshire

– Bournemouth, Dorset and Poole, Isle of Wight, North Hampshire and PUSH

The HCA role - investment and

enabling

Central to our new role is combining investment, enabling

and land to support delivery of local priorities for housing,

regeneration and economic prosperity

Investing in new housing and regeneration

Proactive enabling support to local partners

Utilising surplus public sector land assets and working

with government to manage the land and property assets

of RDAs

Developing the new model for affordable rent with

registered housing providers (RPs)

Economic regulation of RPs

Local investment planning

Local Investment Plans – all will be

completed with partners by March 2011

HCA is working with 158 local

partnerships nationally and has delivered

16 LIPs in South West operational area

Aligning investment in housing and

regeneration with emerging LEP priorities

Engaging RPs in taking forward thematic

and spatial priorities

Aligning:

– Investment

– Land

– Other funding streams

– New models and tools, e.g. Developer

Partner Panel

HCA funding for affordable housing

2009/10

£3.7bn

2010/11 (budget)

£2.7bn

2011/15 TOTAL

£4.5bn

The 2011/15 total covers both funding for existing NAHP commitments and funding

the new model, includes mortgage rescue, empty homes and continued

provision for Gypsies and Travellers and Places of Change

Target of up to 150,000 new affordable homes,

including 67,000 from committed programme

A new delivery model

Flexibility to generate additional financial

capacity to support new supply

Offers to cover a four-year period

Close collaborative working is key:

– Providers

– Local authorities

– HCA

Local priorities shape new supply

More

for

less

Affordable Rent

Main element of programme

Rents set at up to 80% of market

level (service charge inclusive)

for that property

Up-rated by RPI + 0.5% for

duration of tenancy

Minimum two-year fixed term,

flexibility to offer longer tenancies

Allocations and nominations are

expected to be unchanged

Other options to meet local needs

Affordable home ownership

(shared ownership or equity loans)

where this is a local priority and

offers value for money

Funding for social rented housing

may be considered in exceptional

cases

Other programme elements:– Mortgage Rescue

– Homelessness Change Programme

– Traveller Pitch Funding

– Empty Homes

Conversions

Crucial element to generate sufficient capacity

Consider mobility and risk to provider

No ring-fencing of capacity but encourage providers to aim to invest in same wide housing market area

Primarily to Affordable Rent, but flexibility to convert to shared ownership where appropriate

Good asset management

Even more important

Where is your stock?

What are its characteristics?

What legal restrictions?

– Loan agreements

– S106s

– Nomination agreements

Affordable Rent at a local level

Affordable Rent delivery has

to be aligned with local

priorities

HCA will assist local delivery

with the right mix of:

– Public land assets

– Affordable Rent

– Regulation

– Aligning public funding streams

Local

delivery

Regulation

NAHP/

Affordable

Rent

Land

Aligning

public funding

Affordable Rent at a local level

Providers must work with local authorities in putting forward packages and developing proposals

HCA will seek information on provider discussions with local authorities

HCA will work closely with local authorities in investing in new supply

HCA will work to deliver LIP

priorities

Next steps

Local teams work with LAs, Registered Providers and developers to ensure Affordable Rent meets local ambitions and reflects priorities

Support around housing, tenancies, lettings and allocations, planning and use of land, as well as New Homes Bonus

April: working with RPs on package proposals

3 May: deadline for submission of bids

May – June: assessment and negotiation of offers

June – July: national aggregation and analysis of programme

w/c 4 July: national decisions on programme

July: new programme implementation

Summary

Spending review signals a shift

in the way housing and

regeneration is delivered

HCA will invest in housing and

enable regeneration

Flexible local approach essential

for delivery

RPs critical to planning and

delivery

Alignment of need and

opportunity, affordable homes

programme in South West to be

delivered locally

All partners have a role to play