Transcript PRESENTATION TO RUTH KELLY – NEW GROWTH POINTS

KENT HOUSING GROUP:
ASHFORD 29 SEPTEMBER
2011
HENRY CLEARY – HOUSING & GROWTH TRANSITION PROJECTS
DIRECTION OF TRAVEL
Coalition Government policies – some
generalisations
•
Out large rigid spending programmes
and controlling public bodies
•
In local tax freedoms, social enterprise,
release of public land, selective,
competitive public funding, better vfm
•
Out National Government direction
•
In local leadership and innovation
•
Out Government imposed targets
•
In Market incentives, deregulation,
liberalisation, local choice
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eg. Tax Increment Financing/ Business rate
retention, Community Infrastructure
Levy
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Housing supply is a key political priority
“A housing offer fit for the 21st
century, providing new homes in
the right places, is…vital for our
future economic
competitiveness…”
“…let me be entirely explicit.
Britain needs more homes”.
“…a clear and pressing need for
more homes to meet growing
demand…”
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Why do we need to build more homes?
The underlying demand for housing is strong...
o We’re a growing society
o 232,000 new households projected to form each year until 2033
 ...and house building has consistently fallen short
o 2010: 102,500 completions (lowest since 1923-24)
o But persistent mismatch for several decades
We’ve seen a significant deterioration in affordability
o Average house prices – 2000: £114,000; 2010: £216,000
o Lower quartile house prices – 2000: 3.9x earnings; 2010: 6.8x earnings
o First-time buyers increasingly locked out
Budget 2011 recognised that home building makes a significant
contribution to economic growth
o
o
o
o
Each new home creates 1-2 net jobs for a year
Housing construction represents 3.5% of GDP
Increases tax-take, lowers JSA count
Underpins our long-term economic performance
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DIRECTION OF TRAVEL ON HOUSING
Making the housing market work better

Putting LAs and communities in the
driving seat

De-regulation and attracting greater
private investment

Encouraging new models eg major
increase in self build

More ambitious targets for public
funding vfm eg on leverage, more
selective or short term assistance

Encouraging LAs and providers to
work together at scale and to
innovate
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The challenge
Housing – work to encourage effective
demand
Lowest level of house building since 1923/4 – a lack of ‘effective
demand’ is immediate constraint
Mortgaged purchase of new build properties down over 50% 2006-2009
The response
Dialogue with regulators, lenders and developers
Budget announced introduction of a new First Buy product:
o Equity loan co-funded by Government and developers
o Will support nearly 10,500 FTBs by Spring 2013
o First homes already sold
Encouraging equity investment in ‘build-to-let’
o Reform of Stamp Duty Land Tax on bulk purchases
o Removing barriers to residential REITs
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Housing – Work to bring forward supply and help
delivery
Tackling barriers and improving
incentives
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Planning simplification (eg Use
Class changes)
Empty Homes Strategy
(forthcoming - £100m
earmarked)
Growing Places Fund
Using public land
Simplifying standards eg zero
carbon
Access to borrowing – eg TIF
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Growing Places Fund
Upfront investment in infrastructure is challenging. Community
Infrastructure and Growth Funds demonstrate good vfm
Chief Secretary announced a £500m Growing Places Fund (18.09.11)
to help unlock housing and economic development
Ministers want to put local areas in the driving seat:
o Local partners to identify investment priorities (LA accountable
body)
o Flexibility to define geographical scale and mechanism
o Opportunity to create a “revolving fund”
Final scheme details published around Autumn Budget Statement (29
November)
Focused discussion with local partners in October
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Freedoms and incentives to support delivery
Local Government Resource Review
Local Business Rates retention – an incentive to support business
growth
Tax Increment Financing – a potential tool for forward-funding
infrastructure to support growth
Community Infrastructure Levy
A more transparent and efficient way of capturing developer
contributions. Newark and Shropshire – other front runners.
Intended to give LAs greater flexibility and ensure communities feel the
benefits
Duty to Co-operate on plans and infrastructure
An enabling power for strategic matters and not prescriptive but LAs
will be required to address this as part of their local plan and
examination
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Accelerating release of Government land
Why does it matter?
An estimated 40% of land suitable for housing development sits in public land
banks
Significant proportion owned by central government and agencies
What are we doing?
Budget 2011 committed to accelerating the release of government land
Homes and Communities Agency led the way:
o Announced first tranche of sites on 31st March
o Enhanced land release strategy published in June
o Use of ‘Build Now, Pay Later’ techniques
In June Govt committed to release land for 100,000 new homes in SR
Major landholding Departments to publish land release strategies in
September and held to account by ‘Star Chamber’
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MULTI LA INVESTMENT APPROACHES
Why the portfolio approach will pay……
•
LAs banding together can package
land and assets to secure investment
Scale can secure greater leverage
•
Weaker sites and inner areas can
benefit from cross subsidy. Politics of
growth should underpin leafy areas
supporting brownfield
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Easier to attract competitive public
funding eg Affordable Rent
•
Provide social housing without grant
on gifted land to charity or with build
now pay later – deferred receipts
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A more flexible Social
Housing system
Giving LAs greater flexibility in the
types of tenancy provided –
powers in Localism Bill • Making better use of stock by
reducing underoccupation –more
responsive to need
• Allowing greater flexibility on
waiting lists and transfers
• Tenant cashback
• payment by outcomes for housing
services
• Benefit changes - DWP pilots of
“management of safeguarding of
landlord income” – proposals invited
for 4 in England
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INNOVATION ON THE PLACE OFFER
•
Re-thinking how public
assets are used - Ashford
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Importance of top quality
design – new approach
with DCCabe
•
Art, temporary uses, new
events rather than large
public projects
•
Local dialogue on growth
and benefits – eg CIL
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KENT HOUSING ISSUES - CONCLUSION
Innovation and trial
•
Kent has a high reputation on
joint working and innovative
thinking;
•
Freeing up of national
frameworks creates major
opportunities eg on flexible
approaches to tenancy and
benefits changes
•
Cross LA structures will get the
best results on investment
•
Government is encouraging a
multi-LA approach on growth
funding and on planning cooperation but LAs must decide
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