Housing Strategy with Campbell Tickell – event write-up

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The Northern Housing Consortium and Campbell Tickell hosted their annual Housing Strategy seminar on 29th November.

 

Chairs Opening

The session was chaired by Maggie Rafalowicz from Campbell Tickell, who opened the session with an introduction discussing the current context for housing strategy. The opening introduced the challenges faced by housing and what strategies will need to address. Challenges include financial pressures including high interest rates, rising homelessness, consumer regulations being introduced for local authorities and resident engagement. The chair emphasised the importance of housing as an issue, as it is central to so many other issues facing the sector.

 

The Balance between New Build, Regeneration and Retrofit

The first speaker was James Clark, Assistant Director of Housing, Rotherham Council. James spoke on Rotherham Council’s plans and current situation in regard to their session, including the various things that Rotherham has to balance regarding their strategy and how they plan to address challenges.

James began the session by explaining to the session the dynamics of Rotherham and explaining to the group a little bit about how they have managed to build 500 new homes. This includes working with developers in more rural areas where the council has found it difficult to build previously. James also spoke about the difficulties that Rotherham is facing, such as affordable housing in rural areas. However, there was successes highlighted with James demonstrating to the group the houses that they have managed to build in the areas around the town centre.

The group was shown some of Rotherham’s policies around housebuilding to tackle problems around cost, the small site homebuilding initiative and the housing acquisitions policy, which was mentioned to the group as a way of trying to do “more for less”. James also talked to the group around energy efficiency and the challenges of doing this alongside other work and the costs associated with it. Finally, James spoke about the lessons learned from the Social Housing Decarbonisation Fundm including the importance of resident engagement and how there needs to be plans put in place for retrofit including investment plans and strategies.

 

Strategy from a Rural Perspective

John Burroughs, Housing Strategy and Development Officer at the new North Yorkshire Council was next to speak. Having brought his experience from working in Scarborough. John started the session by talking about the new local authority and some of the dynamics, explaining that it is the largest authority in England and Wales by square kilometre with a population of 620,000. In North Yorkshire, 65% of residents live in an urban area but around 35% live in a sparse area, with 17% living in a super-sparse area.

John spoke around the issue of affordability in North Yorkshire, with house prices being averaged around £284,000 in an area of low income and higher energy prices and transport costs. Included in this is the fact that the population of rural areas is aging, with people moving away due to loss of rural services.

John then moved onto the issue of holiday lets. In North Yorkshire there are around 8,00 holiday lets and around 8,200 second homes, which is around 6% housing stock. This gets even greater as you get to the coast, with some villages having excess of 50% of stock being either holiday lets or second homes. This is a major issue as it reduces supply, which increases rents and house prices, greatly increasing the risk of homelessness. John also spoke about the challenges to develop in rural areas, such as higher costs to develop on rural land.

Discussing how they planned to meet these challenges, John talked about the rural housing crisis being a key priority in their new strategy. John also discussed working with key partners such as the Mayoral Combined Authority and Homes England to develop an enhanced rural affordable housing supply pipeline, and sufficient investment. North Yorkshire Council has already had some successes, such as the delivery of community-led housing schemes in rural areas using Community Housing Funds.

 

Consumer Standards and Partnership at the Local Level

The next part of the session included two speakers from different organisations; Ceri Victory-Rowe, Director, Campbell Tickell and Mandy Sawyer, Head of Housing and Neighbourhood Services, Leeds City Council.

Ceri began this section by discussing the Regulator of Social Housing’s (RSH) consumer standards and what they mean for local authorities. Ceri first mentioned what had been in the consumer standards up to this point, including the different standards around Home, Tenancy, Neighbourhood and Community and Tenant Involvement and Empowerment. Following this there was a discussion around the new consumer standards and what they include. Included in this, stock quality has been a key part of the new standards, meaning that local authorities and housing associations need to have an accurate, up-to-date and evidenced understanding on the condition of their homes which must inform their provision of good quality. Ultimately, these new standards will mean that councillors will be responsible for ensuring the local authorities compliance. These standards will be in effect from April 2024.

Mandy then discussed the housing strategy from Leeds City Council and how new regulations can apply going forward. Mandy presented Leeds’s housing vision, with sought to meet the city’s housing needs whilst also providing good quality homes that are affordable. Another key part of this vision is ensuring that there is appropriate support for those who need it, which includes reducing inequalities, care integration and age and child friendly housing. Mandy ended the discussion with a section around how social housing regulation will impact the strategy, with the key takeaway being the requirement for more collaboration between the local authority and the registered provider, especially on key issue areas such as anti-social behaviour and homelessness.

Affordable housing completions reach the highest levels in eight years.

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The Department for Levelling Up, Housing and Communities (DLUHC) recently published new data on the number of new affordable housing starts and completions in 2022/23.

Across England, 63,605 new affordable homes were completed in the year: an increase of 7% on 2021/22 and the highest number since 2014/15. Looking forward, more than 71,000 new homes began construction in the year. This is the highest number of affordable housing starts since data collection began in 2014/15.

Homes for affordable rent accounted for 38% of affordable housing completions, making it the most common tenure. Shared ownership was the second most common tenure, accounting for 32%, while social rent made up only 15% of completions.

Private Registered Providers (PRPs) built 78% of new affordable homes in the period, compared to 14% by Local Authority Registered Providers (LARPs).

 

The Northern picture

Social landlords built a total of 13,282 homes across the three Northern regions in 2022/23. This is, again, the highest figure since 2014/15.  The chart opposite shows the annual number of affordable housing completions between 1991/92 and 2022/23.

A total of 13,849 affordable housing starts commenced within the year too: the highest figure since 2019/20.

Exactly half of all affordable homes delivered in the North were for affordable rent, compared to 33% for shared ownership and 11% for social rent.

The North West region built the highest number of new affordable homes, at 7,034 in the year. You will find a full regional in the below table.

Region Number of affordable housing completions (22/23) Number of affordable housing starts (22/23)
North East 1,857 3,023
North West 7,034 7,504
Yorkshire & Humber 4,391 3,322
North 13,282 13,849
England 63,605 71,046

Twenty-nine percent of affordable homes in the North were delivered as part of Section 106 agreements. This continues the pattern of Section 106 delivering proportionately fewer homes in the North than across the country. For comparison, section 106 delivered 47% of all new affordable homes in England.

 

The ten Northern local authority areas that built the greatest number of new affordable homes were:

  • Leeds – 665 homes
  • Cheshire West and Chester – 636 homes
  • East Riding of Yorkshire – 584 homes
  • Preston – 519 homes
  • Wigan – 498 homes
  • Cheshire East – 496 homes
  • Warrington – 450 homes
  • Newcastle upon Tyne – 425 homes
  • Manchester – 413 homes
  • Doncaster – 408 homes

 

You can find further detail and statistics on affordable housing development from DLUHC here.

750,000 private renter households in the North let down by Government’s energy u-turn

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Shocking new analysis, announced in a report today, shows the extent to which private renters in the North will be hit by Prime Minister Rishi Sunak’s net zero u-turn, announced in September.

 The government’s decision to scrap plans to force private landlords to improve the energy efficiency of their properties could leave over 750,000, or around two-thirds, of households living in privately rented homes in the North with higher energy bills and poorer living conditions.

The announcement means landlords no longer need to make improvements to get their rental properties to the minimum Energy Performance Certificate (EPC) C rating by 2028.

The previous proposal was to raise the standard to EPC C, meaning landlords would incur costs, paying on average £4,700 per property. The government estimated in 2020, before the energy crisis, that this would save tenants an average of £220 on their energy bills every year¹.

The findings have been published in the Northern Housing Consortium’s (NHC) Northern Housing Monitor report, an annual ‘state-of-the-region’ report for housing in the North.

Nearly two-thirds of privately rented homes fail to meet the EPC C standard and it was estimated they cost around £680 more to heat last winter compared to homes that meet the EPC C benchmark. Those living in the North West (330,000 homes) and Yorkshire and Humber (312,000 homes) regions were the most severely affected.

For the private rented sector, the report highlights that 62,000 homes in the North will need to be upgraded annually.

The Prime Minister’s announcement potentially means that many northern households will suffer as a result of living in poorly insulated and inefficient to heat homes which undermines their occupants’ current health and children’s life chances.

The NHC report also shows that rising fuel poverty is an extensive problem and is not spread equally across the country. There are 1.04 million fuel-poor households across all of the North’s housing stock – this is over 30% of the nation’s fuel-poor households.

Tracy Harrison, Chief Executive of the Northern Housing Consortium, said:

“The government’s decision to scrap plans to raise minimum energy efficiency standards will have a detrimental effect on hundreds of thousands of households across the North.

“The Prime Minister’s u-turn overlooks the existing costs of an inefficient energy system with 750,000 privately rented households in the North living in properties that are performing below band C.

“Once again, tenants living in private rented homes will face higher energy bills and live in poorer conditions, without their landlords being held to account for making improvements to their properties.

“The private rented sector accounts for more than 1 in 6 of the North’s homes, which also puts the UK’s target of reaching net zero by 2050 at risk and simply generates greater pressures in later years.”

The monitor is NHC’s account of the state of the housing market in the North of England, highlighting emerging trends and identifying the developments which are having the most significant impacts on people, homes and neighbourhoods in the North. A copy of the full Monitor is available on the NHC website at www.northern-consortium.org.uk

The Department for Energy Security and Net Zero (DESNZ) has launched SHDF Wave 2.2.

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The guidance documents, clarification responses, application forms and supplementary tables are all now available here on GOV.UK.

The latest round of SHDF funding will allocate £80m to social housing providers across England to help fund home energy efficiency upgrades.

Registered providers, including local authorities, housing associations and charities, preparing to bid for SHDF funding are eligible for free one-to-one support from the SHRA team. The SHRA has launched a brand new series of masterclasses, drop-in clinics and bootcamps tailored to organisations bidding in this round of funding. Click here to register for the free support.

By completing a 10-minute Self-Assessment, you can find out how prepared you are to bid for funding, and what support is available to you.

Summit 2023 event write-up

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The Northern Housing Consortium’s (NHC) annual Northern Housing Summit took place at Aspire, Leeds on 9th November. This annual event brings Northern housing colleagues together from government, housing providers and more to discuss the key challenges facing the sector.

 

Housing in 2030 and politics today

The Summit was kicked off by NHC’s Chief Executive, Tracy Harrison, to introduce the key focus for the Summit – housing’s vision for 2030. Tracy asked the sector to think beyond the immediate future and to see the day as a blank page on which to layout what the housing sector wants to achieve by the end of the decade.

Just two days since a King’s Speech where housing played a minor role, the Summit’s host Mark Easton, spoke on the wider political context and the possibility of a new Labour government under Sir Keir Starmer coming to power in a 2024 general election. Starmer and his top team have consistently said that they will see housebuilding as a priority in government, with a commitment to build more than 1.5 million new homes within the first Labour parliament. Mark also noted the appropriate nature of Aspire, the venue for the day, which was originally built as the headquarters for the Yorkshire Pennybank – an institution dedicated to helping working people save for to buy a home. In the midst of a housing affordability crisis, an apt venue indeed.

The Summit was closed by guest speaker, political pundit and ex-advisor to Ed Miliband, Ayesha Hazarika. Ayesha stressed the importance of the housing sector in the current political context, saying that this appears to be the first general election in her career where housing plays a key role within all of the major issues, with pundits, politicians and voters making the inherent links between housing, local government pressures, immigration, public service levels, climate change and the cost-of-living crisis. Ayesha also made it clear that the sector should be stressing to Labour that to meet their ambitious housing targets, they will need the social sector to play a counter-cyclical role to compensate for plummeting private housebuilding.

 

Devolution

Devolving power locally was a key focus of the day. NHC members were joined by Mayor of the Liverpool City Region, Steve Rotheram, to discuss the merits of devolution. The Mayor discussed how the Liverpool City Region was beginning to see the fruits of the establishment of a Mayoral Combined Authority for the area, and was beginning to chart its own course. Mayor Rotheram outlined the scale of the challenge on Merseyside as to decarbonising the area’s housing stock which totals more than 700,000 homes, with over £100m of investment required to retrofit the stock effectively. One major criticism of the current devolution agenda was that that it doesn’t yet go far enough, that while it is positive that more funding can be delivered more locally, funds often come with difficult strings attached and limitations on how spending can be administered, meaning that the Authority doesn’t really have autonomy over spending – “It is decentralization, not devolution” was a common sentiment in both the Mayor’s plenary, and the subsequent devolution panel session including Karbon Homes Chief Executive, Paul Fiddman; MSV Housing Chief Executive, Charlotte Norman; Newcastle City Council Chief Executive, Pam Smith; and the Chief Executive of Connect Housing, Helen Lennon. Everybody involved in devolution discussions agreed that a single departmental-style funding settlement, with autonomy over local spending, will be the golden prize for Mayoral Combined Authorities.

 

Housing today

The state of housing in the North today was the focus of discussion during an afternoon session teasing the upcoming 2023 Northern Housing Monitor. Arc4’s Graham Long spoke through some preliminary findings and highlighted four ‘strategic challenges’ for the North’s housing sector:

  • An undersupply of homes – around 44% too low in total
  • Systemic unaffordability for private tenants
  • Under-investment in existing homes, especially in the private rental sector
  • Homes unfit for the climate

An additional focus was placed on the affordability crisis for private tenants on low incomes. The freezing of Local Housing Allowance (LHA) rates at 2020 levels. This year’s Monitor will show that the impact of this decision three years down the line is that only 7% of homes in the North are now let at levels at or below the LHA.

The Northern Housing Monitor will be released in full, and made available to NHC members, in December 2023.

 

Regulation

With less than six months until new consumer standards come into force in April 2024, the topic on the mind of every registered provider at the moment is the changing regulatory environment. A consultation on new, strengthened consumer standards closed in October.

Richard Blakeway from the Housing Ombudsman, Chief of Regulatory Engagement at the Regulator of Social Housing, Kate Dodsworth, and Indra Mudie – a Customer Board Member at Home Group – joined the Summit to discuss the emerging regulatory changes and some findings from the consultation.

All members of the panel stressed that landlords should have already started aligning with the new standards and the importance of strong data and the need for data systems to speak with one another. Landlord mergers and associated merging of data systems were highlighted by the Ombudsman as a possible pinch point leading to poor data outcomes and possible complaints.

Kate Dodsworth also noted that the consultation on draft consumer standards received over 1,000 responses and that, in general, responses from tenants were more positive about the new standards than landlords.

 

Pride in Place: views from Northern Communities

A new piece of research developed by the NHC and Thinks Insight & Strategy was also presented at the Summit, into how Northern communities perceive ‘Pride in Place’. This research involved speaking with residents across five different communities in the North to discuss what they thought of their local area, what issues there were and what they would like to see to improve where they live. The areas were:

  • Benwell, Newcastle upon Tyne
  • Blackpool, Lancashire
  • Knowsley, Merseyside
  • Moss Side, Greater Manchester
  • Skipton, North Yorkshire

The research identified significant existing pride in where people live, some consistent sources of dissatisfaction emerged as part of the work. These were:

  • Access to basic services
  • Sense of community decision-making
  • State of the local environment

A key solution throughout the work, amongst others such as rebuilding local capacity to enact change, was that devolving power closer to communities so that those with the most investment in their area feel empowered to deliver change would be of great benefit. Residents involved in the work also greatly valued green spaces that are well managed and accessible, as well as communities having a space to host events and activities.

The full report can be accessed here.

Reshuffles and Resignations: November’s key ministerial changes

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November saw major changes in government with prime minister Rishi Sunak carrying out a reshuffle ahead of the Autumn Statement and a potential 2024 general election. The spotlight of these changes fell on the unexpected return of former prime minister David Cameron, who was made Foreign Secretary by Sunak, marking his return to government since stepping down as prime minister in 2016. Cameron takes up the role vacated by James Cleverly, who replaces Suella Braverman as Home Secretary.

Further changes to the Cabinet include Victoria Atkins becoming Health Secretary, replacing Steve Barclay who has taken over Therese Coffey’s role as Secretary of State at the Department for Environment, Food and Rural Affairs (DEFRA).

There was major news for the housing sector as housing minister, Rachel Maclean, was removed from the role after nine months and replaced with Lee Rowley. Rowley, MP for North East Derbyshire, was briefly made housing minister by Liz Truss in September 2022 but was later appointed as Minister for Local Government and Building Safety by new prime minster Rishi Sunak in October 2022. Lee Rowley becomes the 16th housing minister since 2010. Simon Hoare MP has been appointed to take on Rowley’s former local government brief, whilst Baroness Penn has been appointed as a junior minister in the Department for Levelling Up, Housing and Communities.

There were also changes to the Labour frontbench this month, with eight junior ministers resigning to back an amendment to the King’s Speech which called for a ceasefire in Gaza. The resignations included Paula Barker, who left her role as Shadow Minister for Devolution and the English Regions. Jim McMahon, MP for Oldham West and Royton, has become Shadow Minister for English Devolution and Local Government. Labour have also created a new role within Angela Rayner’s Shadow Levelling Up, Housing and Communities team, with MP for Blaydon, Liz Twist, being appointed to the new Shadow Minister for Local Services and Communities brief.

For more information, see details of all Government Ministers and the Shadow Cabinet.

The NHC will continue to engage with both the government and the opposition in the run-up to the next general election, as we focus on our influencing priorities of putting housing at the heart of a rebalanced country and meeting the net zero challenge.

How Valuations could assist Balance the Decarbonisation Investment Cost

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There is an increasing amount of pressure from funders within the sector, for the valuation of securitised portfolios to include the associated costs of decarbonisation works. Whilst the Government’s most recent messaging on EPC and Net-Zero targets may have softened, we can be assured the sector will not overlook the importance and the need for more energy efficient homes and the benefits they provide the communities they serve. As a consequence, and rightly so, this investment is a necessity and one which will continue, with all actions focussed upon providing the best homes possible.

There is no getting around the fact that the level of capital expenditure required to fund decarbonisation, creates a significant challenge and putting these costs into valuations takes a huge amount of value out, however with some changes to loan security requirements, there may well be a part solution we can explore.

As Valuers, JLL are currently urging funders to adopt a ‘lotting’ approach to loan security valuations to help the sector’s stock decarbonisation efforts. ‘Lotting’ involves the allocation of different properties into groups according to factors such as tenure, size and geography, as well as other portfolio characteristics.

This is by no means a new approach to assessing value; it has been used in stock rationalisation sales for the past two decades as a means to generate demand. In turn this can often drive more value, by opening up sales to a wider audience and parties who may not necessarily be in a position to acquire an entire portfolio. It assumes the ability to purchase individual lots and is conducted with the support of a direct evidence base from previous market transactions.

Although this approach is adopted under commercial lending, for loan security valuations in social housing finance, valuers have not been permitted to use ‘lotting’. Funders currently instruct on a restricted basis of valuing units in a single hypothetical portfolio.

We would argue that the current restrictions are not maximising value, as it does not truly reflect how a lender would actually realise its security if there were a default. The value of ‘lotting’ is making valuations a truer reflection of the market into which the security would be sold. To provide some context, if valuing 1,000 units for loan security, we are currently assuming a single hypothetical transaction rather than four lots of, say, 250 units each, which is not how the market generally trades.

If funders were to allow valuers to overlay how the market actually operates, in most cases, albeit not all, you should be able to produce a higher value that is more reflective of how security would be realised. This additional value would then allow us to deal with a large part of the decarbonisation problem and its impact upon portfolio values.

JLL is actively lobbying the sector via various forums, providing the supporting modelling to demonstrate the positive impact ‘lotting’ can provide in meeting some of the current investment
challenges. As with anything new to the sector, it is an evolving conversation, but if anyone would be interested in finding out more, we would very much welcome the opportunity to share the discussion.

Richard Houghton – JLL Affordable Housing Valuation North
richard.houghton@jll.com

Pride in Place Goes to Preston for Peoples Powerhouse Convention

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The NHC will be in Preston this week for the This is the North Convention 2023.

 The NHC is delighted to be on the agenda at the Peoples Powerhouse This is the North Convention, taking place in Preston across the 29th and 30th of November. Alongside Blackpool Coastal Housing, we’ll be providing a workshop discussing the findings of the recently published Pride in Place: Views from Northern Communities. Based on workshops undertaken across the North with NHC members and their residents, the session will discuss the community view on what makes a great place to live.

Peoples Powerhouse exists to help every northerner have a voice on the decisions that affect their lives and puts the views of northerners themselves central in conversations on what the future of the North should look like. The Convention promises to bring together thought leaders, activists, and change-makers from across the North to discuss, learn, and embolden the power of citizens at a local and regional level.

With our own contribution to this vitally important discussion, Pride in Place has worked with social and private rented tenants in Benwell (Newcastle), Skipton (North Yorkshire), Moss Side (Manchester), Knowsley (Merseyside), and Blackpool (Lancashire) to understand how community power can go hand in hand with the work of local organisations like NHC members. With the final report northern communities themselves have put forward a range of recommendations, from thinking differently about how public services are accessed, how everyone can be involved in shaping neighbourhoods for the better, and identifying a range of small projects that can be championed at the local level.

At This is the North the NHC joins a stellar line up or organisations including CLES, IPPR North, Involve, and the JRF. More information can be found HERE and tickets can be accessed HERE.

Pride in Place: Views from Northern Communities can be viewed HERE.

Get retrofit ready!

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The government has opened the window for applications to Wave 2.2 of the Social Housing Decarbonisation Fund. This top-up fund will make available up to £80m in grant funding to help social housing landlords install energy efficiency measures.

If you’re thinking of applying, or are already working on energy efficiency improvements, make sure you put residents at the heart of plans with our free resources.

Heartwarming Homes, produced in partnership with PlaceShapers and Tpas England, will support you to communicate with, and engage residents in energy efficiency projects. Using input from the Behaviour Change Network, it will help you work with residents to overcome barriers to having energy efficiency work done. It’ll support you to build trust and put residents’ needs at the heart of energy efficiency improvement programmes. It includes practical advice, and provides a range of resources, such as template letters, videos, a step-by-step communication process, and a language style guide.

The Retrofit Self Assessment Checklist looks at ways to make sure your sustainability programme meets the needs of residents and communities. It includes real-life examples of how you can make the make recommendations from the award-winning Social Housing Tenants’ Climate Jury a reality. It can also be used to benchmark the effectiveness of your sustainability programme.