Hertfordshire Housing Conference
9 November 2012
Housing and growth
The role housing associations can play
in stimulating the local economy
Kevin Thompson
Chief Executive
kevin.thompson@nhh.org.uk
www.nhh.org.uk
What I will cover
National picture
What is driving the recovery
The role construction could play
Government thinking – stimulus package
The contribution housing could make
Hertfordshire picture
Hertfordshire housing associations contribution and capacity
The way forward
www.nhh.org.uk
What is driving the recovery?
Estimated GDP growth by sector to quarter 3 2012
Impact on housing
Construction sector supply chain employs three million people
and generates around 13% of GDP
Lowest level of housebuilding for 90 years
Housing represents 12% of construction down from 17%
232,000 new homes needed year on year
114,000 in 2011
www.nhh.org.uk
Contribution housebuilding can make
New homes a quick way to boost growth – 330,000 plots
already with planning permission (CPRE)
Benefits retained within local economies – jobs, schools,
suppliers, local people housed to work in local businesses
Compare High Speed 2 – economic benefits being assessed
from 2037.
Impact on investment – attractive, stable, long term
Contribution to finance sector recovery
• £10 billion bond financing since 1987
• £5.4 billion since the 2008 banking crisis
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Facts and figures
Additional 1% of GDP for every 100,000 homes built
1.5 jobs in construction for every home built
Up to six jobs in the supply chain for every home built
Every £1 spent on construction generates £3 in the wider
economy
(source National Housing Federation)
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A practical example
Impact of spending £1 billion on shared ownership properties
66,000 new homes
99, 000 new jobs in construction
396,000 new jobs within supply chain
£15.25 billion generated within the
wider economy
(source National Housing Federation)
www.nhh.org.uk
Political tide turning
David Cameron
“The government is serious about rolling its sleeves up and doing all it
can to kick start the economy. (the proposals) provide a comprehensive
plan to unleash one of the biggest homebuilding programmes this
country has seen in a generation”
Nick Clegg
“Todays major boost to housing and planning will make it easier to build
a home, easier to buy a home and easier to extend a home. A boost
that will get Britain building again. Building thousands of affordable
homes and generating thousands of new jobs.”
Ed Balls
Labour commitment to spending £3 billion on new homes
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Homes for Britain
40 organisations connected with
housing and construction promoting
housing as ‘a driver for growth,
mobility and strong communities’
Mark Prisk
Launching the campaign at the Conservative party conference “delighted to
support this initiative and strongly support the principle of building more
homes”
John Cridland, Director General CBI
“The single most important thing the government can do to get the economy
going is to get housebuilding going. We need the housing equivalent of the
Olympics”
www.nhh.org.uk
Prime minister’s stimulus package
Announcement 6 September pledged
£40 billion equity guarantee for infrastructure
£10 billion equity guarantee for private and affordable rented
housing
Extra £200 million equity finance to stimulate building for rent
Extra £300 million for affordable and empty homes
Planning holiday and Section 106 changes around non-viability
Accelerate the release of public land via the HCA
Additional support for first time buyers
www.nhh.org.uk
Prime minister’s stimulus package
In order to
Generate 70,000 new homes including affordable and starter
homes
Generate 15,000 new affordable homes
Fast-track the planning process for new development
Support 140,000 jobs in the construction sector
Support investment in new and existing homes
Support the government’s aim of a market led boost for the
economy
www.nhh.org.uk
Initial response
New money for affordable housing
Insufficient detail. Strings attached? Will it be worth it?
Expressions of interest only been sought to date
Planning relaxations
Backlash of concerns about what might go up?
Section 106
Is there slack in the planning system to reduce time taken?
Will appeals be any quicker?
How many stalled sites will come forward to be renegotiated?
Scrapping S106 entirely resisted for now
www.nhh.org.uk
Housing associations in Hertfordshire
Hertfordshire Chief Executive’s Group
Aligned in the Hertfordshire Housing Consortium with
local authority heads of housing
B3 Living Housing Association
Hightown Praetorian & Churches Housing Association
Howard Cottage Housing Association
North Hertfordshire Homes
Origin Housing
Riversmead Housing Association
South Anglia Housing
Thrive Homes
Watford Community Housing Trust
www.nhh.org.uk
Economic impact in Hertfordshire
Spend in the local economy
Collective turnover
Amount spent on property maintenance
Amount spent on suppliers
Staff salaries - largely spent in local economy
£290 million
£87 million
£125 million
£63 million
Jobs
Number of employees
Number of apprentices and trainees
1,800
35
Homes for Hertfordshire workers
Affordable homes provided
Proportion of affordable homes in the county
Households we house
52,000
60%
10%
www.nhh.org.uk
Indirect impact on the local economy
Approach to Procurement
Strategies to make it easy for smaller local firms to tender for work
• Advertise in Hertfordshire eg Supply Hertfordshire Journal
• Buyers events
• Toolkit to assist bidding for work
• Our own pre-qualification standards as alternative to Constructionline to bid
• No minimum turnover - assess risk relevant to type and value of work
being sought
OJEU tendering evaluation criteria includes
• Commitment to skills and training
• Encouragement of local employment
• Helping local communities thrive
www.nhh.org.uk
Indirect impact on the local economy
Housing the workforce
High private sector rents 37% rise in last five years – likely to be 27%
higher by 2017 on current trends – discouraging modest income
workers who drive the economy from settling in high value areas such
as Hertfordshire
Regeneration
Redevelopment of shops, community facilities, improving
neighbourhoods – encouraging and retaining investment
Contribution to employment and skills
Contribution to Hertfordshire labour market – recycling skilled workers
Minimum of £2.9 million on training
www.nhh.org.uk
Stimulating supply
Public land release
Easy economic impact for government to release this
Government owns 40% of UK land
Enough government owned brownfield land to build two cities
the size of Leicester
Government commitment to stimulate release – little to show
Contribution local authorities can make
www.nhh.org.uk
Stimulating supply
Certainty
Rents – commitment to current RPI based regime only till 2015
Flexibility on use of assets – to encourage investment in new
homes
Government grant? Yes or no.
Chancellor’s Autumn statement
Spending Review 2015
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