North West housing markets

1
North West housing markets the Governments
response

• Paul Schofield
• Head of Housing GONW (specialist adviser to HCA)
• 31st March 2009

2
(No Transcript)
3
(No Transcript)
4

• National affordability has improved slightly in
  the last year due to house price falls but..
• . the number of first time buyers is down and
  the percentage of income required for a deposit
  is up.

5

• In the 12 months to December 2008, housing
  completions in the North West fell by 21,
  compared with a 13 fall in England as a whole
• However housing starts in the North West fell by
  62. The average for England was 43

6
Dealing with the downturn - help for consumers

• For tenants
• Bringing forward 550m of planned spending in
  order to deliver up to 7,500 new social homes
  over the next eighteen months on top of current
  assumptions
• PBR brought forward 250m to sustain and
  accelerate Decent Homes programme and 175m for
  Major Repairs Allowances for Council Houses
• Continued focus on and investment in homelessness
  prevention
• Enhanced Housing Options Trailblazers to offer
  homes and jobs advice
• and for First Time Buyers
• The new Homebuy Direct scheme (400m to help
  18,000 individuals buy their first home available
  through the programme) as well as existing share
  equity and shared ownership schemes

7
Dealing with the downturn Maintaining capacity
in the Construction Industry

• The HCAs 200m (not capped) pot to purchase
  unsold stock, of which 198m has already been
  spent on 5,700 affordable properties.
• Creation of apprentice matching service in
  conjunction with ConstructionSkills, DIUS and the
  LSC, to help retain apprentices with employers or
  place them with new ones if redundancy is being
  considered.

8
Dealing with the downturn Financial Stability

• Coordinated action on the underlying problems of
  the downturn three new financial stability
  schemes
• Asset Protection
• Extended Credit Guarantees and support for new
  asset-backed securities, designed to help get
  credit flowing
• Backed up with audited, enforceable agreements on
  levels of lending to homebuyers and remortgagers
• Lending commitments have been made with the Royal
  Bank of Scotland, Lloyds Banking Group and
  Northern Rock. Each bank has agreed to increase
  their business or mortgage lending
• Turner Report/FSA Review on mortgage market
  reform

9
Impact on the ground in NW

• Stalled and shut down sites
• Few sites coming forward for planning
• Vacant properties city centre fringes, medium
  sized towns - previous buy to let market stopped
• Developer insolvency
• Viability issues
• Rise in repossessions
• Rise in private renting

10
Response in NW

• Establishment of the JEC wide range of actions
  to address downturn
• Looking at
• Demand new and existing tools, marketing
• Impact on people repossessions and jobs
• Investment in existing stock
• Supply

11
Major Site Review

• December January all 43 L.A.s made returns
• Total of 447 sites - represents 81,835
  properties over 3 years supply
• Nearly 60 apartments
• 31 sites completed but stock unsold - 2,250 homes
• 32 stalled sites potentially 3,600 homes
• 166 sites with planning permission but not
  started potentially 21,000 homes

12
Principle Blockages

• Scheme viability - over 268 sites requiring
• Recalibration of masterplans
• additional resources
• change of use type or tenure
• Access to mortgages - 53 sites
• Immediate infrastructure and remediation - 35
  sites

13
Our Approach

• Prioritise sites RSS, Growth, HMR,
  deliverability, existing investment and potential
  
• Accelerate option appraised activity with Local
  Authorities and their delivery partners
• on the 20 prioritised sites of immediate
  importance
• on 25 longer term sites
• Establish dialogue with the major lenders in the
  North West to strengthen viability of schemes
• Meeting with developers
• Look to bring in institutional investors

14

• Looking ahead

• Falling prices home ownership levels
• Access to mortgages will be tighter
• Increased private renting and demand for social
  housing
• Developer assumptions and funding models need
  fundamental review
• However

15

• Looking ahead

• .underlying household growth remains strong
• Aspirations for tenure choice, space and separate
  living remain high
• Broader regeneration is essential for growth in
  neighbourhoods people choose to live in
• Our role is to intervene in market to help meet
  these aspirations

16
(No Transcript)