Part II: Britain & Affordable Housing Initiatives
The construction of new affordable homes for 2016 to 2017 made up 26% of all new homes in Britain resulting in an increase of 18% over the previous year. Whilst schemes have been legislated at the national level by the government to help ease the lack of affordable housing stock local communities large and small have started their own programmes and initiatives to bring relief for local buyers and renters.
England’s West Midlands region has seen an increase in population growth as Birmingham has become an alternative to London for business and residential living. The need for affordable housing is climbing with the Department of Communities and Local Government reporting that half, 370, of all new homes in 2016-2017 were classed as affordable. These 370 homes included 364 new-builds with the rest once being privately owned homes that were purchased and then renovated.
For the year 2015 the number of new-built homes were 690 with 53% of the homes being affordable. The number of new homes built 2015-2016 reached 2,270 with affordable housing making up 15% of the total.
One recent development being considered by the local authorities for new affordable housing units is the conversion of the £750 million Games Village accommodations for the 2022 Commonwealth Games after the games are over that Birmingham will be hosting.
The scheme would include 1000 homes with dining and transport services the BBC reports that the Birmingham City Council views this development as a ‘catalyst’ for future development of 3,000 homes for the area. The units of apartments and town houses would be converted to homes for sale and rent with social and affordable housing.
Ian Ward, leader of the council, said :
"We have a desperate need for high-quality housing in the city and it would have been much trickier to meet that demand if we had not been successful in our bid to host the Games.”
Councillor Jon Hunt told the BBC that ‘it was "crucial" people in the area, which has faced housing, employment and deprivation problems, felt the Games were delivering something for them.’
"It is important we work together with the organisers to secure the legacy we deserve at a grassroots level," he said.
Birmingham Live reported in late 2017 that 1,000 affordable homes for construction were cancelled: “...after developers used a ‘legal loophole’ to avoid the affordable home discount.”
Shelter, the Housing Charity, reported that: ‘...during 2015/16 in Birmingham developers behind the construction of 2,916 homes were able to backtrack on promises to deliver 1,003 of them at the affordable rate by arguing their profits would be unfairly hit.”
Shelter chief executive Polly Neate said:
“Through freedom of information powers, Shelter has been able to reveal the extent to which affordable homes are required in local plans, only to be dropped by developers.
“The Government needs to fix our broken housing system, and it must start by closing this loophole to get the country building homes that are genuinely affordable for people on middle and low incomes to rent or buy.”
Another growing urban area needing housing is Liverpool and new initiatives are being introduced to help the affordable housing shortfall. Liverpool is known for having its share of empty and unused properties.
The Liverpool Echo reports:
“New figures show that within the city, there are more than 3,000 empty properties.”
“In Liverpool, a total of 3,093 houses have remained empty for more than six months.’
“Homes for a Pound is one of a range of measures that Liverpool City Council is currently using to bring a total of 6,000 empty houses back into use.”
It is expected that Liverpool will need 10,000 new homes per year over the next eight to ten years at least to meet demand.
Liverpool Housing Trust (LHT) reports that two new developments to bring to market 38 affordable homes for shared ownership and affordable rent for Merseyside. A grant was provided by Homes England to help complete the project by the end of 2018.
The plan is for one new £1.8 million development on a disused portion of land in High Park Road in Churchtown, Southport. When completed 10 new three-bedroom homes will be available for low-cost shared ownership for helping local people become home owners.
Lin Powell, head of development at Onward said:
“We are committed to increasing the supply of quality affordable homes across the North West, and this development will form part of our wider investment plans for this area.”
“Not only will this scheme bring much-needed affordable housing to Churchtown, but it will also see a previously underused and unloved site being brought back into use.”
Another £3,5 million development at the site that was once Millhouse Pub in Moreton will now be turned into 14 one-room apartments and 14 two-bedroom duplex apartments which when completed will be for Rent-to-Buy. Tenants will then be asked to pay rent at 20% below the market rate for five years.
Lin Powell told LHT:
“We’ve worked closely with local councillors and residents, and taken their concerns about previous development plans for this site into consideration.
“We are confident that these new homes will make a positive difference to the area and look forward to welcoming tenants once the development is complete.”
One new scheme is by Coming Home which is organised by Ronnie Hughes and local artist Jayne Lawless. The plan is to create a service by assisting owners of empty houses to renovate for potential rental and sales.
Ronnie Hughes says:
“There are 9,000 empty homes in Liverpool and most of them are just in ones and twos in otherwise perfectly settled streets. They add up to a lot in the end.”
“We think they could be lived in without very much trouble really. If you’ve inherited an empty home because a relative has died or gone into care then you probably just don’t have the money needed to do it up enough to let it out.”
One local service for assisting lettings is Property Pool Plus for the locals of Liverpool, Knowsley, Sefton, Wirral and Halton. Housing Associations are required to make half of their empty or unused properties made available to the councils for the Property Pool Register.
Property Pool is for applicants looking for affordable housing in vacant property to convert into a new home. Members of Property Pool can log on to Property Pool Plus to search and select a property based on individual need.
The city receiving the most attention for affordable residential property demand has certainly been London. For affordable home buyers and renters the nightmare of being able to find the necessary living accommodations has been frustrating and there appears to be no end in sight of the problem for many.
An analysis presented in “London Housing: 2017” published by the Greater London Authority (GLA) last February stated that for 2015 and 2016:
“The number of affordable homes delivered in London dropped sharply in 2015/16 to 5,790, the lowest figure in at least 25 years. In the last five years there have been 14,920 new Affordable Rent homes built in London, and slightly fewer converted from existing social rented homes. Steep price discounts have increased the number of London council homes sold to tenants through the Right to Buy in recent years, but not to anything like the levels of the 1980s.”
“Over the last three years (2013/14 to 2015/16) a net 87,510 new homes have been completed in London, of which 66,570 or 76% were market homes. Of the remaining affordable homes, 8,070 or were social housing, 4,700 were Affordable Rent and the remaining 8,180 were intermediate.”
The Council Tax data for 2015 regarding empty homes in London had recorded 59,880 empty dwellings equivalent to 1.7% of the total housing stock for that period. It was estimated that 20, 920 homes or 0.6% of the stock had been empty for six months or more.
During his campaign for Mayor of London Sadiq Khan made the local housing situation the cornerstone of his campaign. After he was elected he put forward his plan in November of 2016 titled ‘Homes For Londoners Affordable Homes Programme 2016-21 Funding Guidance’.
Mayor Khan states in his plan:
“Our city’s success is reflected by the number of people becoming Londoners. With 70,000 new Londoners every year, we are a bigger city than we have ever been, and our population is set to top 10 million within 25 years.”
The mayor did secure Government funds of £3.15 billion toward new affordable homes with an initial plan for 90,000 new properties to be available by 2021. An agreement was reached for 58,500 of the total be for London Living Rent and shared ownership.
One proposal that was introduced was the London Living Rent as an intermediate option with locally specified rents. It is designed to help ‘average income level’ households to save for a deposit for purchasing a home.
“Eligibility for London Living Rent is restricted to existing private and social renters with a maximum household income of £60,000, without sufficient current savings to purchase a home in the local area.”
As for London Shared Ownership the plan states:
“London Shared Ownership purchasers should have household incomes that can support an initial purchase of between 25 per cent and 75 per cent of the value of a property, and usually a mortgage deposit of around 10 per cent of the share to be purchased.”
Eligibility requirements for London Shared Ownership require a household income of £90,000 maximum.
The 2016-21 housing plan includes specialised residential accommodations for the the disabled and elderly which the GLA hopes can be planned with financial assistance from the private sector.
To help with the local homeless population the recommendations set forth in an earlier March 2015 guide of the Homelessness Change and Platform for Life (HCPL) sets out how the Mayor is looking:
“...to support the provision of hostel accommodation for single people, including rough sleepers, as well as accommodation that helps younger adults at risk of homelessness, and who would struggle to sustain work or further education without access to settled accommodation. The latter programme has a valuable role to play in preventing young people from becoming homeless.”
An additional £50 million of capital funding has been established for individuals for Move-On Funding to assist the homeless victims of domestic abuse:
“This funding will enable the development of properties specifically earmarked for people who are moving on from either hostels or refuges because they no longer require the support services offered in those types of accommodation, and those leaving the streets who would benefit from a ‘Housing First’ approach.”
One idea being considered by Mayor Khan is to block foreign homebuyers from purchasing property in London until they are first offered to British buyers.
Speaking to The Times Mayor Sadiq Khan said:
“I want to help Londoners by looking at what measures I can offer to make sure they get first dibs on more new homes.”
This one of a kind proposal would operate in three phases: first offers to Londoners then to British residents and finally to overseas buyers.
The Daily Mail reports that 13.2% of new home sales in London were sold outside of Britain. Research found that 30% of foreign buyers would be using the property for living and 70% stated their intention for buying was for investment purposes only.
Manchester’s population increased by more than 80,000 between 2001 and 2011 – a rise of nearly 20%, and the highest of any town or city in the UK.
The Manchester City Council reports :
“In the last five years, 2,721 homes were built through the city’s Affordable Homes Programme, but in the same period 1,800 affordable homes were lost through demolition, Right to Buy and Right to Acquire – leaving a net gain of 921 new affordable homes.”
Estimates suggest that Manchester will require 1,000 to 2,000 new affordable homes per year to keep up with demand.
Councillor Bernard Priest, Deputy Leader of Manchester City Council, said:
“Manchester is leading the way to ensure the city can deliver decent and secure housing that meets the needs of residents that are below the average income for the city.”
“Decent housing shouldn’t be a luxury. It should be something that everyone in Manchester can enjoy. We intend to make sure up to 2,000 homes a year are built that are decent, secure and affordable.”
Two major developments in North Manchester are underway for 135 new-build affordable homes with funding of £2.8 million provided by the Homes and Communities Agency’s (HCA) Shared Ownership and Affordable Housing Programme and £8.433 million loan from the Council for construction of 25 shared ownership and 50 affordable homes.
Also in North Manchester 20 new homes will be bought at the Booth Hall development and will have funding of £345,000 from the HCA and £2.108 million for shared ownership for lower income residents.
One part of the plan is:
“The Council will initially try to find people living in social rented houses who can afford the shared ownership - this will in turn free up more social rented homes. People with the right levels of income who are currently on the housing register will also be sought.”
Cllr Bernard Priest, Deputy Leader of Manchester City Council, said to the Manchester Evening News regarding the latest affordable housing plans:
“These properties fill a definite requirement for high quality, affordable homes in the city. We know demand is far outstripping supply, so it is important that we can use as many funding opportunities as possible to help deliver the homes people need at a price they can afford.”
“I’m particularly pleased that through these schemes we will be able to provide genuine routes on to the housing ladder, which is sadly missing for many people living in the city.
"We will be getting on site quickly for each of these schemes to get the homes to market and start providing much needed homes to Manchester people as quickly as possible.”
Sue Abbott, chair of the board at Northwards Housing, said:
"We're delighted to work in partnership with the Council to deliver these much-needed new homes in north Manchester. We look forwards to managing them on behalf of the Council."
Cambridge’s continued business growth has not surprisingly put pressure on housing stock available for new residents. As a result the Cambridge market has seen a price growth of 55% over the past five years. For South Cambridgeshire price growth for homes been at 43% however both locations have outperformed the averages of both England and Wales of 29%.
The new build stock is mostly at the top end of the local market when compared to secondhand and the Help To Buy price values of £600,000. Investor demand has decreased and prices have been under pressure with large urban extensions in the city decreasing by 5 to 7%.
Savills analysis states:
The average house price currently stands at £428,250, with median prices over 11 times higher than median incomes. Average prices have risen by almost 49% since they bottomed out in 2008/09 –more than any other city in the UK outside of London.
The Cambridge News reports that an alliance of 15 housing associations is planning to develop almost 40,000 new affordable homes across Cambridgeshire as a result of the housing shortage. The group currently manages 48,000 homes in Cambridgeshire and Peterborough.
The new Cambridgeshire and Peterborough Combined Authority has been granted £170 million for construction of mixed tenure and affordable rents. The plan is to meet each £1 of of the authority investment with £6 of their own. The plan will bring to the community 16 new homes with 11 for affordable rents.
Alan Lewin, chair of Homes for Cambridgeshire and Peterborough, said:
“As the first devolved authority to be established with its own housing grant programme, this is a ground-breaking collaboration for Cambridgeshire and Peterborough.
“This region is unique amongst devolved areas due to its diverse mix of urban and rural communities, ranging from world class high-tech business centres to small, agricultural communities.”
Even at the bottom end of the market, lower quartile priced homes (ie the cheapest 25%) are currently averaging £275,000 – up 10% over just the last twelve months. Lower quartile house prices are now 15.7 times higher than lower quartile incomes.
’Cambridge city has seen high levels of housing delivery over the last couple of years, yet it needs more. Future residential development needs to offer a range of products and tenures at the right price point to ensure that the affordability gap does not widen yet further.’
Like the rest of Britain costs and shortages of available housing are no different for the smaller market of Oxford. A recent Savills report states that for all of the homes constructed in Oxfordshire in the past five years only 10% were in Oxford even as Oxford city accounted for 42% of the job growth.
Rents in Oxford are some of the most expensive in the country.
The Oxford City Council says in its analysis:
“The Strategic Housing Market Assessment (SHMA) identifies that between 24,000 and 32,000 homes need building by 2031 to meet the housing need of the City, and this cannot be achieved solely within Oxford.’
The Oxfordshire Growth Board (OGB) says ‘development capacity and housing need in Oxford and identified a shortfall of 15,000 homes.’
Just announced by the Oxford City Council is that three Oxford housing developments have been granted £19.84m of funding from the Government’s Housing Infrastructure Fund (HIF).
The first is the Leys Regeneration Project which received £3.75m to assist in the delivery of at least 300 homes, in Blackbird Leys, and enable wider regeneration of the area.
The plan calls for: ‘The regeneration aims to provide 300 homes by 2025, a significant proportion of which will be affordable and some will be specifically targeted at key workers.’
Another £10 million has been awarded to support development of the Northern Gateway:
“The funding will enable projected delivery for housing of 480 homes by 2025, a significant number of these being affordable. The land is owned by Thomas White Oxford (TWO), a company wholly owned by St John’s College, Oxford.”
A third development is for £6.09m awarded for funding infrastructure that will enable development of the Osney Mead Innovation Quarter. This will help fund housing for students and staff with construction of 600 homes by 2025.
But not only is the need of affordable housing for residents part of the community planning but long term accommodations are being made for the needs of those who are disabled or in need of long term health assistance. The council reports :
“Oxford City Council’s Housing Strategy 2015‐2018 includes objectives to meet the housing needs of older persons 55+, sheltered housing, extra care housing and nursing homes.”
“There are around 18,000 people (12.4% of the population) in Oxford with a long term health problem or disability. Some of those will need specialist adaptations to their homes, such as level access or wheelchair accessibility. Until recently, requirements to build new properties to Lifetime Homes standards helped to ensure that properties could be adapted to meet changing needs. This has now been superseded by the national technical housing standards.”
Next in Part III: Affordable Housing and Developers, Promises Made and Promises Broken.