The Housing Forum North West Regional Workshop

02 June 2009 | Darren James

The launch of The Housing Forum’s Regional Workshops took place at Wulvern Housing Association in Crewe on 14th May 2009. As part of our regular market engagement on house building activity The Housing Forum will be travelling across the country to assess the opportunities in the current market conditions.

Chaired by Shelagh Grant, Chief Executive of The Housing Forum, the workshop was attended by 20 of the region’s senior figures from Housing Associations, Developers, Contractors and House Builders in order to build a rounded view of the area.

Background

Sue Lock, Chief Executive of Wulvern Housing explained her business strategy.  As relatively recent stock transfer organisation, the priority has been on driving up standards in repairs and voids performance, much of which had been achieved through a change programme and Vanguard lean systems thinking.

Looking to the future, Wulvern were intent on expanding homes for the local population but insistent on high quality standards in design and build.  The organisation puts a serious focus on the customer dimension at its heart.

The round table discussion was attended by senior executives, land managers, chief executives and managing directors of developing RSLs who raised the complexities of operating in the current market and the strategies needed to adjust to the changes in the operating environment that the workshop considered would be affecting the house building industry in 2 or 3 years time.

Round up of issues in the region

  • Energy efficiency standards are progressing through eco-homes but the differential with efficiency standards in the existing stock is not being addressed by current policy - reduction/removal of VAT on energy efficiency home improvements could have significant impact.
  • RSLs capacity to provide more homes to rent/shared ownership has been hit hard by the downturn in homes provided through the S.106 route and underlying concern that if grant rates fall there will be a great impact on delivery.
  • Continuity of funding is not guaranteed with banks seeking to reprise existing loan agreements with RSLs and operating what appears to be an “unwritten moratorium” inhibiting money supply to builders and borrowers.
  • “Affordability” issues vary sharply even within a sub region - there are different aspirations and demands for affordable housing that are complex to factor in.  In some instances, house prices may fall further, making the predictions of affordability and the constituent of a local operating market difficult to predict.
  • The scoping of “different ways” to fund the re-modelling of existing estates is urgently needed - possibly through investment trusts or other vehicles.
  • Concern  about the overall  impact of the downturn and whether the recent “green shoots” indicate recovery.
  • Recognition of the serious issue of sustainability shown in the number of organisations examining products and approaches and identifying a need for specialist support.

North West Housing Statistics

Ian Davies, Regional Director for NHBC, provided comprehensive house building statistics for the region. 

Statistics show that:

  • There were 1391 new homes started in the North West in the 3 months to the end of April 2009, 6% of the total UK figure.  This gives a 65% decrease in the same 3 month period a year ago (48% were in affordable housing-ahead of the national trend, but there has been 81% decrease in private homes starts).
  • In the 3 months to the end of April 2009, 1867 homes were completed giving a 44% decrease on the same period last year.
  • At the end of April 2009, there were 12,564 homes being built, this is an 18% decrease on the same time last year.
  • Approximately 89 sites registered with NHBC are in a dormant state, this equates to 2550 homes that are dormant and 650 that are yet to start.

Summing Up the Priorities and Shared Agenda Between the Public and Private Sector

New Model for Partnerships

Delegates recognised that strong and long lasting partnerships were important in the downturn.  A new model needs to provide guidance on how to share risk between developers and RSLs.  For partnerships to survive in the longer term, we need to recognise that new models would be likely to be mostly self-sufficient.

Affordability

Housing affordability remains a significant concern in the region.  High house prices and the lack of mortgages available will have economic and social consequences.  Waiting lists for social housing are growing as high house prices continue to push people into social housing.  This is a wider group of customers with some different expectations and RSLs will need to develop services to meet the needs of these new tenants.

Demand for housing in the area continues to outstrip available supply and shows no sign of slowing down, even during the recession.  New and innovative products will help deal with this issue including flexible tenure models. 

Existing Stock

The existing stock is an acknowledged concern.  As the pace for new build is slowing down, the major challenge for our generation is to bring our existing stock up to standard and beyond.  We have a responsibility to cut carbon emissions and improving the housing stock can make a great impact.

The Housing Forum Working Group on Sustainability and The Existing Stock recommended the introduction of a Code for Sustainable Refurbishment and this is something that delegates backed as a target for improving the stock. 

A recurring concern is how to fund the extensive retrofitting programme that is required. Greening the existing stock requires huge investment and while we recognize the benefit of improving housing in a sustainability point of view, the cost of such projects needs to be addressed.  Funding is needed from government if we are to avoid increasing rent rates for tenants.  In the long term, energy efficiency in existing housing stock will reap rewards both financially and socially but these rewards need to be publicised in order to drive this agenda.

Utilities

Utilities performance has a major impact on completions - and the industry seeming with no recourse to compel improvement. This issue will adversely affect recovery initiatives.

Planning

It was noted that the planning system has not become faster or more efficient during the downturn as you would expect, given the decrease in new starts. 

It was questionable when there would be a change to the planning system but it is clear that a different approach is needed to overhaul structure.  Delegates also commented that plans are focused on developing brownfield sites which is not always the best option especially when considering the infrastructure surrounding the sites.  The increasing expense of bromfield site remediation could be part of the case for a reappraisal of green belt sites if affordable and numerical targets are to be met.

We would like to thank the following for their interest and insight into the housing market in the North West region:

Frances Chaplin, Director, PRP Architects

Ian Davies, Regional Director, NHBC

Mike Doran, Managing Director, Plus Dane Group

Andy Dyson, Business Development Manager, Rok

Rikki Fairclough, Technical Director, Bryant Homes North West    

Sue Lock, Chief Executive, Wulvern Housing

Andy Mackay, Executive Director, Guinness Partnership

Ted McDougal, Director, Bardsley Construction

Stephen Morris, Managing Director, Cruden Group Ltd.

Tim Pinder, Chief Executive, Cheshire Peaks & Plains Housing Trust

Lee Sale, Managing Director, Gleeson Homes North West

Ken Talbot, Executive Director, Harvest Housing Group

Jim Walsh, Commercial Manager, White Building Services Ltd

John Webster, Senior Land Manager, Bellway Homes Ltd.

John Welch, Business Development Executive, Bramall Construction Ltd

Ken Whitaker, Managing Director, Seddon Homes Ltd.

Phil Williams, Build Manager, Persimmon Homes

           

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