Transcript David Lunts London Regional Director Homes and Communities

David Lunts
London Regional Director
Homes and Communities Agency
South East London Partnership
8 December 2008
1. Fundamentals in a changing world
2. HCA – our approach, the London
arrangements priorities
3. Single Conversation
4. Responding to the market – new business
models?
The world may have turned
upside down, but……
London’s population will continue to grow and
household size will shrink
Housing supply has increased – but has never
caught up with historic levels
And will fall next year.....
UK House Price Forecast Aug 07 – Aug 09
So London remains the most expensive place to
buy a home
And waiting lists are growing
So are the homeless
And so is overcrowding
Investors – not primary occupiers have been
main buyers
So the private rented sector has risen strongly in
recent years
The Homes and Communities Agency
• Merger of English Partnerships, Housing Corporation investment
and parts of CLG
• An integrated regeneration and housing agency (more than the sum
of its parts)
• A national agency that works locally (‘single conversation’)
• Supports ‘place-making’ and high quality outcomes
• A bridge between national and regional policies and local ambition
• Moving from scheme based grant to investment based programmes
• Operational from December 1st
• London team of 75
Transformation
Phase In
Startup
1 December
2008
1 April
2009
1 April
2010
The London arrangements
•
•
•
•
•
•
Reflect London’s unique governance
Mayor’s housing strategy
HCA London Board with delegations
Chair: Mayor
Vice Chair: Robert Napier (HCA Chair)
Board members:
- chief executive of HCA
- Mayor’s housing advisor
- 3 London Councils nominations
- LTGDC chair
- LDA chief executive
London HCA Funding Pot 2009-2011
CLG: Thames
Gateway £280m
CLG: Decent
Homes £272m
H. Corp NAHP
£2.2bn
GLA: TFS £200m
EP: FTBI £5m
EP: Programme
£65m
Total: £3bn over 2 years
Short term priorities
1.
2.
3.
4.
Securing existing programmes and commitments
Creating a single team
Co-ordination of efforts – esp. with LDA
Develop new flexibilities (grant rates; Homebuy Direct,
Clearing House etc.)
5. Stock-take of key projects to define turn-key interventions
6. Develop new business models
7. Begin ‘single conversations’ – individually or jointly
The ‘single conversation’
•
•
•
•
Will evolve over 2009-10
Place-based investment planning
Wide range of ‘business products’
Opportunities for cross-borough conversations (eg Olympic
borough MAA)
• Linkages with TfL, LDA and infrastructure
• Local investment agreements
• A negotiation – give and take
The challenges
•
•
•
•
•
•
Credit squeeze: mortgages, corporate debt and RSL loans
Cross subsidy is failing (c15% of typical RSL schemes)
Falling prices and wider recession destroying confidence
S106 drying up and schemes need renegotiation
Build costs remain high
London has particular problems because of high costs of
development and levels of buy to let
• Rental sector remains relatively strong
• New starts down 70% in last 6 months
Future strategy
• From project grant to programme investment (investment to fit
projects, not project to fit grant)
• Investment to underpin cash flow and other risks
• Selective land purchases
• Public land: best value can be different from best consideration
(deferred payments; profit shares etc)
• Equity/JVs: patient money to capitalise recovery plans
• Rent to purchase, intermediate rent and market rent likely to be
key to short term business models
• Longer term opportunities for institutional investment
A pessimist see the difficulty
in every
opportunity;
An optimist sees the
opportunity in every
difficulty.
Winston Churchill