Growth and Prosperity Scrutiny 22/10/15 Growth and Prosperity Scrutiny 22/10/15 Sarah Clayton, Head of Housing Strategy and Enabling
Introduction • What is Affordable Housing? • What is not affordable housing? • How much is there in Salford? • Shared ownership examples • How does Affordable Housing get delivered? • How much has been delivered recently? • What is the national policy direction? • What is the GM ‘thinking’ • What is next for affordable housing?
What is Affordable Housing ? • Affordable housing is social rented, affordable rented and intermediate housing, provided to eligible households whose needs are not met by the market • Affordable housing should include provisions to remain • Affordable housing should include provisions to remain at an affordable price for future eligible households or for the subsidy to be recycled for alternative affordable housing provision. • Critically – affordable housing helps the Council meet it’s responsibility for helping those in housing need.
What is not Affordable Housing ? • ‘Cheap’ housing – housing at the lower end of the owner occupied or private rented sectors. • Private rented housing / homes for sale that are developed by Housing Associations. developed by Housing Associations. • Properties bought through the Governments ‘Help to Buy’ (enables access to O/O with 5% deposit).
How much is there is Salford ? • 30% of homes in Salford are affordable. • GM average is 23%. • Main Housing Association stock owned by City West Housing Trust and Salix Homes. • The council owns 1250 homes in Pendleton. • The council works with a range of partners to deliver new homes.
How does shared ownership work? • 400 existing shared ownership households. • 25% -75% of equity bought with rent payable on the remainder.
Examples: Nightingale Gardens: • 3 bed house £150,000 starting price, 35% stake (£53,500), minimum deposit for the purchase is 5% therefore £2,500 • 4 bed house £160,000 starting price, 35% stake • 4 bed house £160,000 starting price, 35% stake (£56,000), minimum deposit for the purchase is 5% therefore £2,800 Malkins Wood Lane, Worsley - 3 bed house £204,950 starting price, 35% stake (£71,732), rent on remainder £320 per month.
How Does Affordable Housing get delivered ? • There are two main routes for affordable housing new development: - Grant funding from The Homes and Communities Agency. Few schemes are non grant schemes. - Developer contribution for affordable housing through S106s.
What has been delivered recently ? • 3000 new affordable homes from 2007 – 20017. • £3m per year income to the Council from council tax • £20m New Homes Bonus. • Salford has a good track record in using it’s land innovatively with JVs already in place – New Broughton (613); Charlestown (contract) ; Higher Broughton
YEAR NUMBER OF SUPPORTED TOTAL COST % PRIVATE JOBS COUNCIL NEW HOMES AFFORDABL LIVING SECTOR SUPPORTED TAX PA BONUS E HOMES INVESTMENT LEVERED IN 2007/08 270 19 £40,980,679 53% 492 £287,684 2008/09 126 3 £17,745,766 58% 213 £121,828 2009/10 277 3 £28,477,692 41% 342 £301,339 £1,808,035 2010/11 274 3 £37,543,162 38% 451 £295,475 £2,348,248 2011/12 242 1 £41,291,535 63% 495 £307,786 £2,451,517 2012/13 198 £21,396,942 77% 257 £154,989 £1,249,136 2013/14 169 £15,576,155 82% 187 £116,642 £1,010,651 2014/15 575 227 £55,807,068 76% 670 £574,330 £4,697,583 2015/16 194 6 £17,396,887 81% 209 £195,244 £1,577,968 2016/17 617 221 £62,316,384 77% 748 £641,679 £4,318,001 2017/18 151 21 £15,394,518 76% 185 £143,864 £1,173,228 TOTAL 3,093 504 £353,926,787 4,247 £3,140,861 £20,634,366 65%
The delivery challenge – Greater Manchester Combined Authority 9,200 p.a. p.a.
Generation Rent to Generation Buy • Starter Homes (80% of market value, sold by developers to under 40’s). • Voluntary Right to Buy for Housing Association homes (50-70% discount on flats and 35-70% discount on houses to a maximum of £77,900 currently). • Sale of vacant high value council homes (with £ going back to central govt, assumed rate by formula). • Rent reduction (-1% over next 4 years). • Pay to stay for those with high income in social rented. • Impact – Housing Associations reducing development programmes; changing tenure preference; impact on council HRAs
What is next for affordable housing? • Spending Review – to facilitate o/o ? • Reduction in HA development programmes, move towards S/O, outright sale. • Move towards Starter Homes as developer contribution? • Councils who had headroom may continue to develop, but less? • GM emerging view ? • Salford Council – use what we’ve got better? direct development? Business plan and feasibility; In or out of HRA? strong strategic clarity; agree use of land; JV and other options.
• QUESTIONS ?
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