Transcript The new tenancy regime

Affordable Rent Product
SELHP Strategy & Development
Group
This presentation
‘Refresher’ – what is “Affordable Rent”
Homes and Communities Agency funded
programme 2011-15
Housing implications and context
Planning implications?
Refresher – what is “Affordable
Rent”?
Offered by developing housing associations (“Registered
Providers”) following finalisation of contracts with the
Homes & Communities Agency (HCA) - any time now
Rents of up to 80% of market rents
Intended to provide an alternative to social rent – they are
not ‘intermediate housing’
Therefore subject to borough nominations and Choice
Based Lettings.
Eligible for housing benefit
Will be added to definition of affordable housing (PPS3)
Refresher – what is “Affordable Rent”? :
Principles - Less Grant goes further
Increased rents (inc. from re-lets)
=
more money to service loan
=
more development for the low level of grant
(150,000 homes over 4 years)
(Grant was £100k/unit, now £20-30k)
Refresher – what is “Affordable
Rent”? - How do rents compare?
Indicative 2 Bedroom Weekly Rent Levels - SE28
£210
Extra income
to service
borrowing
£196
£184
£180
£157
Service
Charge
£150
£120
£95
£90
£60
£30
£0
Market
80% Market
Local Housing
Allowance
Target Rent and
service
Refresher – what is “Affordable
Rent”? How Do Rents Compare?
New
Charge
SE28
Market
80% Market or 80%LHA
60% Market or 60%LHA
50% Market or 50%LHA
LHA Median
30th percentil LHA
Target rent
Service charge
Target and service
Current
charge
1 Bed
£156
£125
£93
£78
£156
£150
£74
£11
£86
Bedrooms
2 Bed
3 Bed
4 Bed
£196
£242
£277
£157
£194
£222
£118
£145
£166
£98
£121
£138
£190
£230
£300
£179
£208
£277
£85
£11
£95
£103
£3
£107
£104
£6
£111
Refresher – what is “Affordable
Rent”? Are they affordable?
Gross Annual Income
80% Market or 80%LHA
60% Market or 60%LHA
50% Market or 50%LHA
Bedrooms
1 Bed
2 Bed
3 Bed
4 Bed
£23,143
£29,181 £36,000 £41,143
£17,357
£21,886 £27,000 £30,857
£14,464
£18,238 £22,500 £25,714
above universal benefit level
Balance for Rent
Bedrooms required
Single under 25
Single over 25
Couple with no dependants
Couple with 1 child
Couple with 2 children
Couple with 3 children
Couple with 4 children
Couple with 5 children
Couple with 6 children
Single parent with 1 child
Single parent with 2 children
Single parent with 3 children
Single parent with 4 children
Single parent with 5 children
Single parent with 6 children
Lone parent under 18
Lone parent over 18
Bedspaces required
0
1
1
2
2
3
3
4
4
2
2
3
3
4
4
1
1
1
1
2
3
4
5
6
7
8
3
3
4
5
6
7
2
2
Total
Remainder
Suffiient
benefits of benefits
balance
claimed available for Suffiient Suffiient Suffiient
for
excluding
Rent &
balance
balance
balance
average
Housing
Service
for rent at for rent at for rent at target rent
costs
Charge
50%
60%
80%
plus s/c
£51.85
£298.15
yes
yes
yes
yes
£65.45
£284.55
yes
yes
yes
yes
£102.75
£403.25
yes
yes
yes
yes
£184.11
£321.89
yes
yes
yes
yes
£248.09
£257.91
yes
yes
yes
yes
£312.07
£193.93
yes
yes
yes
yes
£376.05
£129.95
yes
no
no
yes
£440.03
£65.97
no
no
no
no
£504.01
£1.99
no
no
no
no
£146.81
£359.19
yes
yes
yes
yes
£210.79
£295.21
yes
yes
yes
yes
£274.77
£231.23
yes
yes
yes
yes
£338.75
£167.25
yes
yes
no
yes
£402.73
£103.27
no
no
no
no
£466.71
£39.29
no
no
no
no
£51.85
£454.15
yes
yes
yes
yes
£65.45
£440.55
yes
yes
yes
yes
= residual income insufficient to cover rent
HCA Programme 2011-15: the
national picture
2008-11 £8.5bn
2011-15 £4.5bn of which £2.3bn
committed
i.e. ‘new’ funding in 2011-15 is £2.2bn
HCA Programme 2011-15: the
national picture
Registered Providers were invited to put forward ‘offers based on framework published in Feb 2011.
“It is now up to you to deliver the homes we need” - The
Rt Hon Grant Shapps MP, Minister for Housing and Local
Government
“Our expectation is that s106 schemes can be delivered at
nil grant input for both affordable home ownership and for
Affordable Rent”.
HCA Programme 2011-15: the
national picture
Deadline for ‘submitting offers” was May 3rd.
Negotiation with Registered Providers in May and
June. Collation of national programme by HCA in
July – RPs informed of indicative programme.
No local authority input or consultation about
indicative offers.
Contracts between HCA and RPs due to be
signed in September.
HCA Programme 2011-15: the
London picture
London programme based on advice of HCA
London Board chaired by the Mayor and including
borough representation.
HCA London transfers to GLA in 2012.
£1.8bn of £4.5bn thought to be allocated to
London
GLA/HCA London has confirmed that rents for 3
and 4 beds will be a lot less than 80% of market
HCA Programme 2011-15: the local picture
Not entirely clear since HCA now has a ‘South
Operating Area’ rather than a SE Area’.
Local housing associations have been asked to
indicate extent of expected programme. Many
are reticent.
3 elements to any programme:
1. Commitments made in 2010-11 and before
2. Scheme specific allocations
3. Indicative programme
HCA Programme 2011-15: the local
picture
Commitments made in 2010-11 and before
HCA forecast:
1.
Bexley
Bromley
Greenwich
Lewisham
Southwark
TOTAL
£13.2m
£10.4m
£36.3m
£32.5m
£42.9m
£135.3m
HCA Programme 2011-15: the local
picture
2. Scheme specific allocations
Bexley
640 homes
Bromley 198
Greenwich 432
Lewisham 399
Southwark 927
TOTAL
2626
IF each home represents £30,000 grant – total = £79m
HCA Programme 2011-15: the local
picture
3. Indicative programme
Maybe c.£100m in SE London??
Registered Providers will agree indicative programmes
with HCA. These will not be based on particular sites – or
particular boroughs. “Cash programme” approach?
Will RPs be looking for suitable sites to utilise their £s? Or
will owners of sites be seeking out the RPs with £s?
Housing implications and context
 The Localism Bill will give boroughs duty to
produce Strategic Policies on Tenancies. But
in the meantime lettings to “Affordable Rent” will
take place. We are drafting interim advice about
these lettings/nominations.
 Government is also introducing power for social
landlords to introduce fixed term tenancies e.g.
5 years.
Housing implications and context
There’s scope for confusion about “exemptions”
Exemptions will normally be households with existing
(secure) tenancies at ‘social’ rents.
It may not be fair or realistic to expect them to move to
fixed term tenancies at higher rents – e.g. decants,
under occupiers, domestic violence cases.
We calculate about 1500 cases each year in SE
London.
To expect a landlord to grant such a household a
‘lifetime’ tenancy not a fixed term one may be
straightforward.
GLA expects RPs to provide some new homes at
‘social’ rents for exemptions – but which ones?
Housing implications and context
Welfare Reform Bill “Making work pay”.
Flagship is Universal Credit. Most benefits
including what is now Housing Benefit or Local
Housing Allowance will be included in this. It will
be capped at level reflecting average household
incomes e.g. for families £26,000 p.a.
In London 80% market rents tip larger households
over this cap:
Housing implications and context
Use and role of the Private Rented Sector
Government will allow councils to
‘discharge duty’ to homelessness
households in the private rented sector.
Use of PRS has increased significantly – but
may have peaked??
Planning implications and context?
Is “Affordable Rent” affordable housing?
If so, on what basis?
Does housing become ‘affordable’ simply if
it is possible to rent it with housing costs
being covered by benefits?
Is housing unaffordable if rent cannot be
covered by benefits?
Planning implications and context?
NB. Local Housing Allowance (LHA) – the
maximum that can be paid as Housing
Benefit for private tenants is based on the
30th percentile of the market and will
increase by Consumer Price Index (i.e.
probably decrease in real terms)
Is LHA the basis for ‘affordability’?
Planning implications and context
Intermediate housing
Shared ownership will still exist.
Local planning definitions of affordability have
been based on knowledge of income levels at
which households are excluded from the market.
Incomes of households in “Affordable Rent” may
need to be higher than this if they wish to not be
benefit dependent.
Intermediate housing: postscript
An update on the presentation in April…
Shared ownership was usually known as
“New Build HomeBuy”
In London the Mayor has introduced the
brand “First Steps”
The HomeBuy Agent responsible for
Headline marketing etc is now the “First
Steps Agent”
Intermediate housing: postscript
Introduction of ‘First Buy’ – new properties
offered to first time buyers - 20% interest
free equity loan for 5 years
Government now requires that members of
the Armed Forces be top priority along with
existing social housing tenants
Summary of NBHB sales (SE London)
05/06
06/07
07/08
08/09
09/10
10/11
Sales to
existing
tenants
11%
9%
6%
8.7%
5.5%
3%
Sales to
BME
34%
34%
32%
43%
27.5%
18%
Ave.
household
income
£27,411
£28,959 £26,859 £29,857 £30,897 £32,143
Ave. share
purchased
39%
41.5%
40%
38%
36%
35%