Draft London Housing StrategyDraft London Housing Strategy& Funding Prospectus 2015-18& Funding Prospectus 2015-18

Alan Benson Alan Benson GREATER LONDON AUTHORITYGREATER LONDON AUTHORITY

Homes for London - overviewHomes for London - overview

“This strategy aims to put in place the resources to deliver more than 42,000 homes a year …. But I also want to make sure that the homes we build better reward those who work hard to make this city a success”

Identifying the challengeIdentifying the challenge• A population boom

− 9m by 2020 and 10m by 2030

• A changing tenure pattern• An affordability crisis• A growth in acute housing need

− Homelessness, rough sleeping & overcrowding all growing

• Housing is essential infrastructure− Building homes creates jobs− Supports London’s skilled workforce

Setting the ambitionSetting the ambition

Setting the ambition – Setting the ambition – increasing supply, improving qualityincreasing supply, improving quality• At least 42,000 new homes a year

– With 15,000 affordable & 5,000 long-term PRS– Double intermediate by 2020 and double again by 2025

• The 2015-18 programme– 40 per cent low cost home ownership– 30 per cent at “capped” rents – 30 per cent at “discounted” rents

• Improved design & stock improvement– All homes to meet LHDG standards & bespoke PRS design– Retrofit every poorly insulated home by 2030– All council homes to meet decent homes standard by 2018

Delivering the visionDelivering the vision

Delivering the vision - Delivering the vision - finance, land and capacityfinance, land and capacity

• A long term funding settlement for London– Borrowing reforms and devolved property taxes– New investment framework & London Housing Bank

• Bringing forward the land – Housing Zones and focus on opportunity areas– Public land, town centres, densification & non-housing land

• Finding the capacity – Using PRS to drive supply– Unblocking stalled sites and increasing competition

Fulfilling the covenantFulfilling the covenantLondon house prices

Tenure trends

Households in TA

Overcrowded households

Fulfilling the covenant – Fulfilling the covenant – supporting workers & meeting needsupporting workers & meeting need• Supporting workers– Improving the intermediate market– Supporting home ownership– Improving the PRS– Rethinking allocations and mobility

• Meeting housing need– Increase provision of purpose built homes for older people – Halve the level of severe overcrowding in SR– No second night out and no living on the streets

The funding packageThe funding package

• Over £1 billion to support the delivery of 42,000 affordable homes in 2015-18

• Up to £200 million for the London Housing Bank to deliver up to 3,000 homes

• Around £145 million to improve the condition of 9,500 council-owned homes

• £120m for the Get Britain Building Fund to kick-start housing delivery on 22 sites to deliver 2,755 homes up until 2015.

• At least £750m in aggregate from the Build to Rent programme and the Help to Buy equity loans programme up until 2016.

Funding - expected outputsFunding - expected outputs

Tenure 2008/09 - 2010/11

2011/12-Q2 2013/14

Q3 2013/14 - 2014/15

2015/16 - 2017/18

Rent (social and affordable) 22,260 17,568 18,575 25,200First steps 18,400 9,383 9,474 16,800Affordable rent to buy - - - 3,000Stock upgrade to council homes - 21,585 23,415 9,500Total new homes 40,640 26,951 28,049 45,000Annual average new homes per spending round 13,547 13,750 15,000

Annual average stock upgradeper spending round - 11,250 9,500

TimetableTimetable

Publication of draft strategy 25 November 2013

End of consultation period 17 February 2014

Review responses/revise strategy February - March 2014

Submission to London Assembly Mid March 2014

Submission to Secretary of State End April 2014

Publication of final strategy Late June 2014

Funding prospectus - overviewFunding prospectus - overview

• Maximising supply and supporting working Londoners

• High quality homes • Over £1bn for 42,000

affordable homes in 2015-18• London Housing Bank to

deliver 3,000 more• 60:40 Tenure mix

Product offer Product offer • Increased levels of flexible home ownership • A differentiated Affordable Rent offer

− Rents capped at a low level for those most in need− Discounted rents targeted at working households − Providers required to deliver 50:50 mix

• Increased market provision (sale & rent)• Maintained design standards− Current approach maintained − Compliance/certification will be same or less onerous

• Amended size mix− 36% of discounted rent as larger homes− but more smaller homes to address welfare reform

A framework with Boroughs A framework with Boroughs

• Agreed set of principles with each Borough− The level for capped rent (target rent minimum)− Distribution of flexible home ownership and AR− Nominations to AR− Marketing intermediate− Where not agreed 25% noms retained by provider

• Allocations– All affordable home ownership via First Steps portal – All affordable rent nominations with boros– Sub-regional nominations ended– 5-10% nominations for pan-London mobility– Providers retain 10% to 25% of nominations

Other issuesOther issues

• Smaller providers consortia– Expectation those delivering under 100 units will partner– GLA will ‘match-make’ providers

• Clearer Section 106 rules– 100% RP controlled sites not treated as ‘s106’– The GLA will only consider for grant for a s106 scheme if it is

unviable and provides additional affordable homes

• Carrots and sticks– Support on environmental retrofit– Increased asset management flexibility– Non participants lose ability to operate RCGF

Timetable

Publication of prospectus December 2013

Deadline for provider bids Midday 10 March 2014

Assessment and negotiation March – May 2014

Announcement of allocations Late June 2014

Partners in contract 30 June 2014

2014/15 starts profiled on IMS 31 December 2014

Questions?