Kent Housing Group10th September 2013
Terrie AlafatDirector, Housing Growth and Affordable Housing Department for Communities and Local Government
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A Housing Strategy to increase supply
Supporting demand • Recognition of aspiration of home
ownership• Increasing demand for rented
homes
Increase housing supply• Across all tenures – addressing
barriers
Underpinned by systemic reform • Planning• Greater land availability
Getting house building moving again is crucial for economic growth – having a direct impact on economic output, averaging at 3% of the GDP in the last decade.
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The Challenge: Barriers to demand
• From 2000-2007, annual mortgage lending increased by 200%
• Lending broadly flat sinceMortgage Lending
• Sharp fall in annual mortgage lending in 2007-8.
• First time buyers particularly hit as deposit requirements soared
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%
First Time Buyers – Deposits as % of Income
• Demand for private rented housing is growing - the sector now houses 3.8 million households in England, compared to 2.0 million in 2000..
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Supporting Home Ownership NewBuy Right to Buy
Expanding Rented Sector
Unlocking Housing Development
Help to Buy: Equity
Loan
Affordable Homes
Programme
Build to rent
Debt Guarantees
PRS taskforce
Local Infrastructure
Fund
Get Britain Building
Public sector land
Growing Places Fund
£3.5bn, £1bn
Guarantee75,000 plus transactions
Nearly £6bn, £10bn
GuaranteesUp to
210,000homes
£1.6bnUnlocking
capacity for over 120,000
homes - 11,000 started
on site
Delivery to 2015
PLANNING REFORM
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2013 has shown the most positive signs to date of recovery in housing market activity
Quarterly housing starts & completions(seasonally adjusted)
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
1990
1
1991
2
1992
3
1993
4
1995
1
1996
2
1997
3
1998
4
2000
1
2001
2
2002
3
2003
4
2005
1
2006
2
2007
3
2008
4
2010
1
2011
2
2012
3
Quarter
Starts
Completions
Quarterly housing starts hit their highest point since 2010
BUT starts and completions are down on the long term average
The flow of residential planning approvals in Q1 2013 7% higher than a year ago.
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
2008 2009 2010 2011 2012 2013 Q1only
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This is driven by improved demand and consumer confidence
•Value of mortgage lending up 29% from a year ago. Strongest lending since October 2008.30% increase in number of loans to FTB in year to June 2013. Quarterly lending to first-time buyers was at its highest since 2007.
Net reservations per site
0
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0.7
0.8
Jan '08 Jan '09 Jan '10 Jan '11 Jan '12 Jan '13
And reservations on site are moving ahead of seasonal trends.
UK FTB loans as proportion of total mortgages (CML data)
30
40
50
Oct-08 Feb-09 Jun-09 Oct-09 Feb-10 Jun-10 Oct-10 Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12 Feb-13 Jun-13
Month
% o
f all
mor
tgag
es
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Builders are responding to better market conditions
Construction orders are at their highest level since 2008.
UK construction PMI showed the fastest rate of growth in 6 years (since September 2007) – and the fourth consecutive month showing a positive change, driven by residential construction.
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10%
20%
30%
40%
50%
60%
70%
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90%
100%
'Dec 11 'Mar 12 'Jun 12 'Sep 12 'Jan 13 'Jun 13
% of units On Hold % of units progressing towards start
And there are more units progressing towards a start – 11% more in June 2013 than in June 2012.
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Spending Round: housing package
DEMAND • Help to Buy: Equity Loan £1.3bn in 15/16• Help to Buy: Mortgage Guarantee
LAND• £102 million to unlock large sites• Strategic review to identify Government surplus land and set disposal target • HCA will be Land Disposal Agency
AFFORDABLE HOMES• Affordable Homes programme £3.3bn, plus Guarantees• Rent certainty CPI + 1%• New £400m Rent to Buy programme
PRIVATE RENTED SECTOR• Build to Rent £300m 15/16• Guarantees
LOCAL GROWTH
• £2bn/yr local growth pot • local transport investment
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Spending Round: Affordable Homes Delivery
• £3.3bn package for 165,000 new affordable homes over 3 years from 2015-16.
• Stronger focus on driving out efficiencies and managing assets actively.
• Rent certainty - rents in the social sector will increase annually by CPI + 1%, for ten years, from 2015/16.
• £400m to pilot a new approach to affordable housing in ‘Affordable Rent to Buy’.
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Spending Round: Local Authority assets
• £100m for stock transfer in 2015/16 with strong value-for-money and tenant support.
• £160m for Decent Homes targeted at authorities to reduce greatest backlog.
• Aim to ensure no authority will have more than 10% of stock non-decent by 2016.
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What will this deliver?
• Aiming for 55,000 affordable housing starts a year, the highest rate of new build affordable housing for at least 20 years
• Current programme demonstrated the sector’s ability to drive efficiency and deliver more with less public subsidy
• New programme provides the long term investment framework landlords asked for. In return, we will look for:
• Continuing focus on efficiency and value for money• Opportunities to make more of the asset base – including
the range of options on re-let• Non-developers and under-developers to consider their
capacity to start building
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Homelessness
Recognise pressures arising from:• Affordability (linked to supply)• Welfare Reform
Government maintaining support to VCS and LAs - £470m over the current SR
Gold Standard for homelessness services – includes commitment to limit B&B for families.
;
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5,000
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15,000
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25,000
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40,000
1998199920002001200220032004200520062007200820092010201120122013
Seasonally adjusted Non Seasonal
Statutory Homelessness Acceptances and use of Temporary Accommodation still well below 2003 peak - though increasing.
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Where next?
• How will housing associations use flexible tenure, rent certainty and increased efficiency to drive investment in affordable homes?
• Will Affordable Rent to Buy offer new opportunities to meet housing need in Kent?
• What more can local authorities do with their land and assets to support supply?
• Will housing be a key part of your LEP’s draft local growth strategy due in the autumn?