Why doesn’t Lambeth simply build new Council homes in the Housing Revenue Account (HRA) and offer secure tenancies?

• The HRA is a finite resource and the money available is being used to bring existing homes up to the

Lambeth Housing Standard

• The cap on borrowing and the cost of financing borrowing means the HRA cannot borrow more money

• Social rents are so low that they do not provide enough income to fund new building so market

housing is needed to subsidise new homes for social rent

• Councils are not allowed to develop market housing

• However, they are allowed to set up wholly owned companies to do this

What options does the Council have for building more homes? Option Pros Cons

Enter into a Development Agreement with a housing

developer

• Development risk sits with the developer • The Council provides the land but the

developer finances the work • Track record of maximising the number

of homes

• Income generation a priority - 15% to 20% developer margin

• Council’s ability to shape the pace, quality and mix of new homes is limited to the agreements in the contract and the planning process

• Affordable homes sold to a housing association and assured tenancies

Contract with a Registered Provider

• Similar pros and cons to the above as many Registered Providers now act as developers • Registered Providers have a good understanding of affordable housing delivery

Secure affordable housing through the

planning process (i.e. s106 deals)

• Development risk sits with the developer • The Council provides the land but the

developer finances the work • The new affordable homes could sit in

the HRA and offer secure tenancies

• Limited opportunities and so limited supply

• Separates geographically market and affordable housing

What is Homes for Lambeth?

Homes for Lambeth will be a new company set up by Lambeth Council to deliver much

needed housing.

Pros Cons

• The Council will have more control over the type of new homes being delivered on Council land

• The land is retained by the Council on a Freehold basis and held within Homes for Lambeth which is owned by the Council

• Homes for Lambeth will address market failure by prioritising new homes at Council rent levels and market rent homes which are affordable to Lambeth residents

• The traditional 15 to 20% developer margin will be reinvested in more housing in the borough

• There is scope for Homes for Lambeth to deliver 100’s of new homes at Council rent levels over the next few years.

• Some residents are concerned that the Council could decide to sell the company in the future

• The new tenancies will be assured not secure – but will be written by the Council and will be made as similar to secure tenancies as possible

• Requires the Council to act more commercially

Can Homes for Lambeth be sold?

Homes for Lambeth will be protected by a ‘Triple lock':

•Unanimous Cabinet vote

•A 2/3rds majority of the full Council

•Unanimous agreement of the HfL Board

Also the land will remain in Council hands - Homes for

Lambeth only has a leasehold.

What does the new lifetime tenancy look like?

How will Homes for Lambeth work?

Affordable housing

Joint venture housing

Market housing

• Lambeth Council retains the Freehold

• Homes for Lambeth builds the new homes

• Homes for Lambeth subsidiaries will own

the new homes

• Homes for Lambeth will tender

management and maintenance services

Where will we see Homes for Lambeth start work first?

•89 new homes

•70 at Council level rents

•New nursery

•Construction starts in May 2016

•Completion expected in March 2018

Lollard Street Somerleyton Road

•304 new homes

•More than 120 will be at Council rent levels

•65 homes for elderly residents

•Planning permission granted in 2015

•Construction schedule in planning

Westbury, Knights Walk, South Lambeth &

Cressingham Gardens

•More than 650 new homes

•More than 320 will be at council level rents

• Last autumn approval given for Westbury, South

Lambeth and Knights Walk and development

management teams appointed

•Approval given for Cressingham Gardens last month

•Consultation and construction schedule in planning

What are other Council’s doing?

LB Ealing: Broadway Living A wholly owned subsidiary created to enable direct development of

mixed tenure housing

LB SouthwarkWholly owned company to deliver Council homes

UAC Thurrock: GlorianaA wholly owned vehicle to deliver affordable housing across the

borough

LB Barking & DagenhamCouncil granted long lease of site to fund which developed units and underlet site to Council's wholly owned company. Quasi PFI

solution: company's rental income stream enabled it to repay fund over agreed long term period

LB LewishamA borough wide vehicle intended to encompass a number of diverse

sites and opportunities. Potential to create multi layered legal structure with individual SPVs sitting underneath an operating

company

LB Lambeth: Somerleyton Road (for comparison & potential integration)

Vehicle to purchase completed development from Council: intention to own asset for the long term

LB Enfield: Enfield Innovations LtdVehicle to invest in the Private Rented Sector (PRS) in the borough, initial through the Small Housing Sites project but potentially more

widely

Royal Borough of Kensington and ChelseaVehicle intended to act as a developer of mixed tenure housing

across borough

LB WandsworthVehicle to invest in PRS across the borough

MB Gateshead LABVA Local Asset Backed Vehicle (LABV), which is a 50/50 joint venture

vehicle with private sector partner. The intention is to cross-subsidise between different types of sites and deliver 2500 new

homes

Greater Manchester Pension FundCouncil to act as developer, commissioning building contractors to deliver mixed tenure housing,

with investment from the Council’s Pension Fund

In summary

•Homes for Lambeth will enable the Council to build the more and better homes that we

need

•It will do this in a way which doesn't put strain on current Council resources

•Homes for Lambeth will be 100% Council owned

•Any surplus Homes for Lambeth creates will be used to support Lambeth

•Current tenants will see their rents set at Council level rents using the government's

formula and their rights protected through Lifetime tenancies

How can I find out more?

•Go to: http://estateregeneration.lambeth.gov.uk/hfl , watch the video and read the Q&A

•Cabinet report: http://moderngov.lambeth.gov.uk/ieListDocuments.aspx?

CId=225&MId=9359

•Email: info@homesforlambeth.co.uk

•Call: 0207 926 1369