New Council Homes Cost £627,000 More Than Expected

A new housing scheme funded by Nottingham City Council has gone way over budget, and new funds have had to be spent to meet the shortfall. Back in 2014, the Council approved funding for 55 new homes, at a cost of £5.915 million. However the total cost of the scheme has ended up at £6.542 million - £627,000 more than originally planned for. The scheme to build 46 houses and nine bungalows was managed by Nottingham City Homes. A council report into the issue said: “This scheme is one of a number of new build schemes delivered by Nottingham City Homes where cost have exceeded the approved budget. In future improvements in budget setting and monitoring are needed to ensure that increased costs are approved in advance. The impact on viability needs to be checked before significant additional costs are committed to.” Read more on the Nottingham Post website.

https://www.nottinghampost.com/news/nottingham-news/new-council-homes-cost-627000-1718588

Whitehall Must Reform ‘Viability Tests’, Campaigners Say

The Government must amend the definition of ‘affordable housing’ and change its approach to viability testing in its updated planning framework, campaigners say. Two organisations have called on Whitehall to ‘clarify and strengthen’ its commitment to delivering affordable housing by amending the definition and reforming the viability test. The Town and Country Planning Association (TCPA) and the Association for Public Service Excellence (APSE) have made the call ahead of the publication next week of the updated National Planning Policy Framework (NPPF). New research from the TCPA and APSE found 60% of councils said the viability test had ‘hindered’ their ability to secure affordable housing in their local areas. Read more on the Local Gov website.

https://www.localgov.co.uk/Whitehall-must-reform-viability-tests-campaigners-say/44833

Housing Infrastructure Fund :Written Statement

The Government announces that we will invest £866 million to help unlock up to 200,000 new homes through 133 Marginal Viability Fund projects, within the Housing Infrastructure Fund. The Government has set out a plan that puts us on track to increase housing supply to 300,000 homes a year and this first wave of funding from the £5 billion Housing Infrastructure Fund is part of a comprehensive programme to fix the broken housing market. This investment will fund key local infrastructure projects including new roads, cycle paths, flood defences and land remediation work where it is needed for new housing to be built. Without this financial support, these projects would struggle to go ahead or take years for work to begin, delaying the homes these communities need.

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-statement/Commons/2018-02-01/HCWS440

Peers Overturn 20 Per Cent Starter Home Requirement

The government’s starter homes policy suffered serious setbacks in the Lords as peers voted through amendments to the housing and planning bill designed to safeguard affordable housing. One amendment would allow councils discretion over how many starter homes are required in new residential developments. The government had wanted the legislation to require that at least 20 per cent of new housing on larger sites would be starter homes. As a result of this change, planning authorities will be able to “grant planning permission for a residential development having had regard to the provision of starter homes based on its own assessment of local housing need and viability”. Read more on the Planning Portal website.

Stamp Duty Hike Prompts Build To Rent Viability Fears

Changes to stamp duty announced in the Budget will hike the rate investors pay for Build to Rent property and could threaten burgeoning investment in the sector. George Osborne announced several property tax changes in the Budget, including a three-percentage-point stamp duty rise on any residential units not bought as a home, and a rise from 4% to 5% on the rate paid for commercial sites. Despite lobbying, the Chancellor declined to offer an exemption to large scale investors, meaning funds investing in the private rented sector will be affected. A lot of people in the Build to Rent sector will be having to go back and look at the economics of a development to see if it is still viable. Read more on Inside Housing.

Lords Issue Critical Report On Government Housing Policies

Peers have added their voice to those criticising current government policies as unlikely to meet demand for either the quantity or quality of new homes needed. The Lords Select Committee on National Policy for the Built Environment has published a report which urged the government to appoint a chief built environment advisor to champion higher standards in the built environment across government departments. The report also recommended that ministers should review the National Planning Policy Framework to make sure developers weren’t using financial viability “to play fast and loose with design quality and sustainability”.  Read more on the Planning Portal.

Housing At Risk For More Than 400,000 Vulnerable People

Ninety-five percent of supported housing providers would be forced to close housing schemes for vulnerable and older people if a planned housing benefit cap goes ahead. The capping of housing benefit at local housing allowance levels for social housing tenants, announced in the chancellor’s spending review, represents a major threat to the financial viability of such schemes because the intensive housing management required is paid for by charging higher rents. These rents are covered by housing benefit for those residents unable to work. More than 440,000 vulnerable people, many of them pensioners, live in housing association homes that are now at risk across England. These include sheltered housing and extra care for frail elderly people, and supported housing schemes for people recovering from alcohol and substance misuse, young people leaving care and women fleeing domestic violence. Read more on the Guardian website.

Housing – Parliamentary Written Answer

Mr Roger Godsiff: To ask the Secretary of State for Communities and Local Government, if he will meet providers of (a) supported housing and (b) specified housing to discuss the effect of the proposed change to social rents on the viability of those types of housing.

Brandon Lewis: We welcome the opportunity to engage with the supported housing sector to understand how the sector’s views can best be accommodated as we implement our policy. Ministers and officials have been discussing this issue with the National Housing Federation and a number of providers. We plan to except specialised supported housing, residential care homes, nursing homes and PFI-funded Extra Care housing from the rent reductions. We are continuing to work with the sector on this issue to ensure the most vulnerable are protected.

Merger Proviso For Rent Cut Exemptions

The government will only consider a rent cut exemption for struggling landlords if they have first looked at merging with another provider, the social housing regulator has warned. The Homes and Communities Agency, in its Sector Risk Profile document, said it will develop guidance with the CLG on the criteria for exemptions from the four-year, 1% annual social housing rent cut.  The HCA said: “Waivers will only be considered for registered providers who face viability or solvency issues and have considered all mitigating actions, including taking all possible costs out of their business and looking at the possibility of a merger partner.” The HCA initially estimated a third of the largest 250 landlords may run into difficulties from the rent cut but later revised this down to a much smaller group of associations. Download the Profile from the HCA website.

Councils Warn Office To Residential Conversions Harming Town Centres

The widespread conversion of offices to homes under Government changes to planning rules are harming London's town centres, creating substandard housing and undermining jobs and growth, councils have warned. The Coalition introduced permitted development rights in May 2013 to allow empty and underused office space to be converted into housing without the need for planning permission. London Councils, which represents the capital's 33 local authorities, believes permitted development rights have created a "free-for-all" which has undermined the viability of town centres by draining away commercial property. At the same time, they have removed councils' ability to demand that schemes include affordable housing for local people. Between May 2013 and April 2015, London boroughs received at least 2,639 office-to-residential prior approval applications. Read more on the Housing Excellence website.

RTB Extension Could See 145k Association Homes Sold

The Chartered Institute of Housing has estimated 145,000 housing association tenants will exercise the Right to Buy over the next five years. The claim was made in the Chartered Institute of Housing’s (CIH) submission to the CLG Committee inquiry into the viability and sustainability of housing associations. “Our initial analysis of Right to Buy [RTB] is that about 1.45 million tenants will be eligible and about 10% will exercise the Right to Buy in the first five years,” said John Perry, CIH policy advisor. “This is based on experience with local authority Right to Buy in the 1980s, taking into account that the proportion of housing association tenants in employment now is a lot lower than was the case with council tenants then. Read more on Inside Housing.

Sector Lobbies On Right to Buy and Rent Cut

The financial straits housing associations are facing due to Right to Buy and the social housing rent cut has dominated submissions to a parliamentary inquiry on the future of the sector.  Written submissions to the CLG Committee’s inquiry on the sustainability and viability of housing associations reveal strong concern over the policies while also apparently wanting to appear supportive to the government. According to the Placeshapers group of associations there was now however a “risk of a drastic loss of new homes” in the light of Right to Buy, required rent reductions and welfare reform.  Read more on Inside Housing.

CLG Committee Launch Inquiry into Future of Housing Associations

The Communities and Local Government (CLG) Committee has announced an inquiry into the viability and sustainability of housing associations. This inquiry will look at the proposed extension of Right to Buy and how this and a number of other government measures may impact on the ability of housing associations to build and develop. The Housing Bill, to be published later this year, will enable the extension of the Right to Buy to housing association tenants, giving them the ability to buy their homes at a discount. Written evidence should be submitted by Friday 28 August 2015. Read more on the Parliament website.

A Double Whammy for the Social Housing Sector

The extended Right to Buy to housing association tenants signals a further blow to the viability of social housing. It comes on top of cuts in capital funding and welfare reforms that have hit social tenants disproportionately hard. Selling housing association homes represents a double whammy for the social housing sector: loss of housing association homes paid for by sale of council homes. The consensus is that the extended Right to Buy will further weaken an already shrinking social housing sector. Social housing will probably be barely 15 per cent of total homes by the time of the next general election. It is also likely that many of sold housing association homes will eventually be owned by private landlords. It is estimated that one-third of ex-council homes sold since 1980 are now in the hands of private landlords. Read more on the Left Foot Forward website.

Developers to Make Affordable Housing Viability Studies 'Fully Public'

A London borough is to make it mandatory for all developers to supply a "fully public" viability study - if they submit planning applications that don’t meet the council's affordable housing target. The Royal Borough of Greenwich requires developers to include at least 35% of affordable housing in new residential developments of more than ten new homes. At the moment, developers who say their development isn’t economically viable with this level of affordable housing have to supply a viability study which they can request stays confidential. The study is then assessed by an independent expert on behalf of the council which makes recommendations to the planning board as part of the overall report it considers in relation to the application. Read more on 24dash.

Housing Association Downgraded Over Funding

A Nottingham-based housing association has today had its governance and viability ratings downgraded by the English social housing regulator over its funding arrangements. Tuntum Housing Association, one of England’s largest black and minority ethnic social landlords, had its governance rating downgraded from a G2 to a G3 today – meaning it no longer complies with the Homes and Communities Agency’s standards. Its viability rating was dropped one notch to V2, meaning it still complies but needs to improve. The 1,300-home had been placed on the regulators’ ‘watch list’ of organisations at risk of a downgrade since June. Read more on Inside Housing.

Minister: “Homes Scheme ‘Incoherent and Unfair’”

A flagship coalition policy which the Government claims will boost housebuilding in Britain is “incoherent” and “unfair” and should be scrapped, the Minister responsible has admitted. In unguarded comments at the Liberal Democrat conference in York, Local Government Minister Stephen Williams admitted the ‘New Homes Bonus’ has no real impact on the number of new homes being built in Britain.  Amongst a raft of criticisms of his department , Mr Williams branded another key policy – preventing authorities from raising council tax by more than two per cent – as “absurd”. Damningly for the Government, the Minister also admitted the smallest councils will “undoubtedly” face “severe financial difficulty” over the next few years due to the cuts handed out by his own department, raising questions about their “viability”. Read more on the Yorkshire Post website.

Findings on Financial Viability of Social Housing Sector

The Commons Committee of Public Accounts publishes its 13th Report of Session 2012-13, Financial viability of the social housing sector: introducing the Affordable Homes Programme, as HC 388.  The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, said: “We welcome the 80,000 homes due to be built under the Affordable Homes Programme, but have serious concerns about the impact of financing the scheme partly through higher rents on the Housing Benefit bill and on affordability for tenants. The Programme will be delivered through £1.8 billion of government grants to social housing providers, but the average grant of £20,000 per home is only a third of that under the previous programme. The government expects providers to make up for the lower grant in part by charging tenants higher rents. This will lead to an estimated £1.4 billion increase in the Housing Benefit bill over the next 30 years.”  Read more on the Parliament website.

Landlords Liable For Injury Caused By Tenant Repairs

Landlords will have to carry out checks on their properties after a landmark court case ruled they are liable for injury caused by work carried out by tenants.  The ruling has cast further doubt on the viability of the government’s tenant cashback scheme, in which tenants carry out minor repairs in return for a cash reward. In the case, repairs and maintenance contractor T Brown Group sued Hillingdon Council after one of its contractors hurt his ankle after falling from a stairway where tenants had removed the banisters for aesthetic reasons.  The judge found that Hillingdon was responsible for the contract worker’s injuries, which left him unable to work, even though it neither sanctioned nor carried out the work. The council now faces a potential six-figure pay out, with the exact figure to be determined at a later date. Read more on Inside Housing.

New Regulator Takes ‘Holistic’ Approach

The new social housing regulator has unveiled its approach to regulation.  The Homes and Communities Agency has published its Regulating the standards document, which provides detail on how it will operate. The regulator says it will work to understand landlords’ business models from a wide evidence base to identify those likely to fail, rather than focusing on governance and viability separately.  It will still publish separate verdicts on governance and viability in its regulatory judgements, but the regulator will now ask eight questions relating to topics including individual landlords’ strategies, financial plans and leadership. Download the document form the HCA website.