Transcript Document

Housing in a time of uncertainty
– planning for the future
Richard Capie, Deputy Chief Executive,
CIH
Housing is a small part of a much bigger
picture
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“The Spending Review will
involve more than the
allocation of resources.
While it will rightly focus on
reducing Britain’s record
deficit and restoring sound
public finances, it will also
provide a platform to
consider new and radical
approaches to public
service provision. The scale
of the challenge presents
an opportunity to take a
more fundamental look at
the role of government in
society and how it can fulfill
that role.”
A new reality – headlines for today
– Housing market remains fragile – record
low interest rates, QE and lack of supply
providing a degree of insulation
– Affordability has improved if (big if) you
can get a mortgage due to current
interest rates
– Mortgage finance has dried up for FTB
– Housing supply has taken a battering
– Government faith largely lies in a new
planning regime which is untested and
is causing some transition issues
– Public investment in affordable housing
has not been a priority compared with
other areas of investment.
– Massive changes in social housing
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Loan as a percentage of value
Average LTV for FTB
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Source : Regulated Mortgage Survey (and predecessor surveys)
Loans as a percentage of value
Where have all the low deposit mortgages
gone?
100%
80%
60%
40%
20%
0%
2005
Below 50%
85-89%
2006
50-74%
90-94%
2007
2008
75-79%
95-99%
Source : Regulated Mortgage Survey
2009
80-84%
100% or over
Help from mum and dad to the fore…
Housing supply has been decimated
102,570 completions in England in 2010, down
13% on 2009
Land values back to 2002 levels
Government response – investment,
burdens and planning reform
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DCLG capital budget cut by 74% in CSR
Uneven investment – regional allocations replaced by local funding
frameworks - limited funds will be stretched
Supporting people funding cut by 6% in real terms, local spend
variations under scrutiny post ring-fencing.
Delivering against the new local investment framework
A new, smaller HCA – supporting local government through an enabling
role
A new approach to rents – up to 80% rents (does it work for you?) – a
step towards a revenue driven investment model
But more than rents, also asset management flexibilities, balance sheet
capacity
HRA reform will enable LA self financing but at what price?
Planning is in flux – end of regional strategies, implementation of Open
Source, s106 reforms
New Homes Bonus as a local incentive for housing building
Reducing regulatory burdens – easing regulations and standards
around new housing
Opportunities for innovation from providers – necessity married with
flexibilities
Government response - regulation
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Regulation seen as “red-tape” rather than market
shaping
TSA still exists but economic regulatory focus
Rent standard, tenancy standard, turn on powers from
2008 Act, vfm standard
Consumer scrutiny role handed over to local tenant
panels and expectation of greater role for local
councilors and MPs
The end of inspection – for Has and Las (including
end to LGPF, CAA, LSPs, LAAs) – the Audit
Commission now going…
Co-regulatory principles still apply – customers are
key – opportunities for providers to work with tenants
and communities to shape a much more localised
offer
Rugg review dropped - housing management of prs
remains variable
Social housing providers on a journey towards
specializing – management, development, care
services, prs services.
Government response - social housing
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Shift from home for life to closer link with
welfare provision (based on need with ability to
change with circumstances)
Waiting lists to be tightened up
Local lettings extended
New flexible tenancies introduced for new
tenants - statutory minimum of two years
Ability to review tenancy after this period,
based on eg: income, size of home required
etc.
LAs can discharge homelessness duty in to
PRS, homelessness legislation left alone, RP
categories continue
Prioritize transfers and re-lets over RP, ie: more
flexibility to let to own tenants
Local tenure strategies
Change in expectations around housing
managers – increasing active role with tenants
Reforms wanted, but affordable rent and tenure
propositions seen as problematic and poorly
thought through
Government response – welfare and
housing benefit reform
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LHA caps (£250 1 bed, through £400 4+ bed)
LHA calculated at 30th percentile rather than 50th
LHA CPI indexed in future
HB deductions for additional residents increased
JSA link – HB cut to 90% for people receiving JSA for 12
months or more SUCCESS - DROPPED
HB calculated for working age households based on size of
property they need
SRR cap to 35
Universal credit caps (household and individual)
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Risk to tenants? Do you know who they are?
Risk to income? Plans around income protection?
Interface with AR model – does it stack up?
Direct payment to tenants
CIH continue to work with government and Parliament
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Consequence or contributor?
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Housing as something that will come as a
consequence of economic growth, not as a
driver of growth per se?
Housing seen as a private function with
reluctant public investment that addresses
market failure (revenue funding via welfare),
rather than proactive view that sees public role
for investment in housing and communities
(capital funding via social housing)?
Is view of housing a new consensus or
circumstantial?
Either way – CIH and your role – switch in
emphasis shortly from policy to practice
Your tenants, your communities, your
business – food for thought
– What will the changes and reforms mean for your housing markets?
(vulnerable home owners, public sector employees, PRS tenants?)
– Who are your existing/future tenants and what will be the impact of
reforms on them?
– What measures can you put in place to support them? Where do you
draw the line with your responsibilities?
– Securing a financial platform for delivery (existing and future debt, risk
profile and viability. benefit and rent reform, new supply, regulatory
direction)
– What are your partners going to look like? Local authorities and third
sector providers?
– Joint services – opportunity or risk?
Finally, shaping your own future
– A window exists to consider your own future in a way that hasn’t been
possible for a number of years
– Do you have a clear vision that “works” in this new context? Your
charitable objectives?
– A social enterprise that serves and delivers for the community? A
community-led organisation? A community-owned organisation?
– Are you clear about how you going to define, establish, measure and be
held to account around the things that matter to your tenants, your
community, your staff?
– Where are you going to be looking for benchmarking and excellence?
Housing and beyond….
– Your own efficiency and improvement plans?
– Do you have the right skills and competencies?
– In your staff teams? As a board?