approximately 32,000 council homes approximately 8,800 leaseholders/freeholders decent homes came to...
TRANSCRIPT
• Approximately 32,000 Council homes• Approximately 8,800 leaseholders/freeholders• Decent Homes came to an end last year, replaced with
our own scheme• 3rd highest amount of social housing built in London
since 2011, with 2,850 homes, also fifth nationally• Regeneration estates uneconomical to refurbish, but
mean-time repairs essential during long-term regeneration
The Hackney-wide context
Regeneration programme background
• 2004 – 2010 Estimated £690m Decent Homes and associated housing repair bill
• £359.57m resources
• Thousands of properties on estates seen as uneconomic to invest in
• Historically, individual site-specific solutions: joint venture or land disposal
• Many schemes, taken alone, financially unviable due to upfront ex-RTB re-purchase costs
• Dashed expectations for households on regenerations estates, worsened by financial crisis
• Then in 2009 Government enables councils to build homes again
• So, schemes progressed with portfolio approach, building 2,760 mixed tenure homes on 18 sites
• Tenants have Right to Return, leaseholders package including shared equity/ownership offer
Proposals past and present
• We don’t do Affordable Rent (80% of market rents)• Council homes for social rent and shared ownership only• So NO Affordable Rent-‘strings-attached’ government
funding for new homes• Private sale homes fund new Council homes for social
renting and shared ownership• No ‘ghetto estates’ of private-only/Council-only• 50% planning requirement across programme (30%
Council social rent, 20% Council shared ownership)• Additional sites being identified
The estate regeneration programme
• Borough-wide programme hits government-imposed borrowing cap
• Three ways to circumvent this:• 1) Overage - better-than-expected private sales, but
uncertain/unpredictable • 2) Right to Buy sales – just £2million expected borough-
wide due to claims by Treasury etc• 3) s106 commuted sums - a ‘bonus’ only, due to
uncertain size and frequency, can’t plan for it• Other areas of expenditure may also require use of these
resources
Government limit on how much we can borrow to build new homes
• Stand alone scheme or in programme: build costs, public realm, community facilities, interest payments on borrowing: Nightingale to break even over 40-year period
• £200-250k to build a property• Shared ownership pays for its build costs, management
and maintenance, does not yield extra funding• Social rent only covers management and maintenance,
does not pay back build cost debt and requires significant cross subsidy
Nightingale funding part one
• Could build more social rented with taller buildings?• Could build more social rented with less green space,
reduced community facilities?• But not our approach – need to work with residents• More than two hectares of Council land vacant• Mainly private and shared ownership to build, exploring
social rent as promised, and added to borough-wide programme
Nightingale funding part two
• Finish masterplan, submit planning application by end of year
• Develop second regeneration estates local lettings policy• Expected at planning committee Spring 2016 – pre-app
process now underway• Developer procurement Spring 2016 – many more bids
after planning permission secured• Site preparation and construction Summer 2016 • Completion in 2020
Timeline
The programme elsewhere:
Colville residents support two private-only towers to pay for new Council homes for social rent/shared ownership
2016 2017 2018 2019 2020 2021 2022Annual Loss in rent 4,555,640 9,202,393 13,943,447 18,782,084 19,345,546 19,925,913 20,523,690 Cumulative Rent loss
4,555,640
13,758,033
27,701,480
46,483,564
65,829,110
85,755,023
106,278,713
Rent loss from 1% reduction
Whilst the rent reduction is for 4 years, the base position in 2019 would be less, therefore there is an ongoing impact with a cumulative £100m loss after 7 years and £725m over 30 years
2016 2017 2018 2019 2020 2021 2022
Current saving Plan 3,185,000 2,985,000 2,785,000 Additional Savings required 1,400,000 1,700,000 2,000,000 5,000,000 500,000 500,000 500,000
Total Savings 4,585,000 4,685,000 4,785,000 5,000,000 500,000 500,000 500,000
Savings require for 1% rent loss