Successful places with homes and jobs A NATIONAL AGENCY WORKING LOCALLY Investment Partner Event, London Akin Durowoju 14 October 2013 East and South East

Agenda  Welcome and Introductions  HCA Update  Programme Performance  New AHP  Q&A  Round up & Close

Contents  SR announcements and HCA role and functions  Delivery to end 2012/13  Current delivery context  General update on progress – are we on track to deliver?  Programme Performance  Considerations for next programme

Budget 2013  Significant new investment channelled through the HCA –£3.5bn Help to Buy –An additional £800m for Build to Rent –A doubling of the £225m Affordable Homes Guarantee Programme –Enhanced HCA land role from April 2015  Builds on HCA expertise, success of our existing programmes and effective regulation  HCA moved quickly  Help to Buy up and running from April 2013 – high volume of reservations  Guarantees bids submitted in May – contracts being issued to successful bidders Speed of delivery is vital to maximise the impact of this investment on the economy.

SR 2013 – Affordable Housing  10 year rent certainty – CPI+1% (convergence)  Further investment channelled through the HCA –£3.3bn affordable housing funding over 3 years –Extension of AHP –£400m Affordable Rent to Buy –165,000 homes (incl RtB replacement, nil grant units etc)  Dept Health funding - £115m specialist housing; £40m homelessness hostels  Lead in period to start of programme  Paves way for Regulator to charge fees

2012/13 Delivery  Another strong year of delivery  Support of partners was key  HCA met or exceeded all core targets: –114 ha of previously developed land back into productive use –323,000 sqm of new employment floor space created –£944m of private sector investment attracted –Affordable Housing statistics published in June  Foundation for strong delivery in 13/14

2012/13 Affordable Housing Delivery  26,114 affordable housing starts on site and 21,515 completions (plus 7,043 FirstBuy completions)  Delivery to mid-point of programme (HCA): HCA (non-London) contribution to 170,000 Delivery 2011/12Delivery 2012/13Sub-total Corp Plan 2013/14 Corp Plan (indicative) 2014/15 Completions32,84021,51554,35525,00029,124 Starts11,23726,11437,351 Key programme management focus on starts this year – maximise starts by September 2013

Current delivery context  Continued limits on public funding  Focus on economic growth  Localism  Risk – diversification and complex environment (welfare reform)  HCA activity focused on five key areas: –Affordable housing –Market interventions –Public land –Local economic growth –Regulation  Spending review

Market context  Number of loans in Q up 17% on same time 2012  Housing starts up 37% but completions down 3% on same time in 2012 Source: DCLG, CML

Affordable Homes Use it or lose it  Mortgage Rescue  Specialist Programmes –Empty Homes –Homelessness Change Programme –Traveller Pitch Funding  Community Led

Other current CL opportunities  Custom Build –c£14m loan funding or custom/self build –Focused on groups/developers  Public land –Look out for public land disposals (website) and any future announcements –Speak to local HCA teams  AH Guarantees Programme –Specific reference to CL and custom build –£45m CME, SOS March 15 and PC March 17  Empty Homes, PRS Guarantees, Build to Rent, CaSSH

Compliance Audit - update  Independent Auditors auditing at present  IAR due date mid November  Provider comments on IAR by end of November  Quality Visits- many completed  Thank you for your input

Housing Standards Review  10 week consultation ends 22 October  Recommends ‘should be capable of application to both affordable & private housing’  Scope of standards; 1. Energy 2. Space 3. Accessibility 4. Security 5. Water efficiency 6. Indoor Environment  Further details at:

Land  SR – HCA disposal agency for surplus public sector land  Builds on experience of: –Bringing surplus public land to market to drive housing growth –HCA land development and disposal plan – land for 14,000 new homes by 2015 –Commercial expertise and complex development experience –Pioneering ‘Build Now, Pay Later’ approach of deferred payment  SR – Strategic Land review – HCA, GPU, Shareholder Executive We are using new ways to increase the supply of public land and speed up development

AHP Next Steps  All allocation handback to be cleared in IMS immediately  All bulk forecasts should be scheduled out immediately  Providers expected to meet IMS forecast milestones in Q3 and Q4  Bring forward substitutes to move schemes out of quarter Q3  Bring forward starts from Q4 into Q3  Bring forward completions from Q1 and Q2 14/15  Bring forward completions from Q4 14/15  Review of development pipeline and available allocation headroom

AHP Next Steps Process to agree re-allocations, in priority order 13/14 completions 13/14 starts that will complete in 14/15 14/15 starts that will complete in 14/15  Need to maximise delivery to year end –Perceived low results on starts will generate questions on our ability to deliver by March 15  Timescales on large scale sites reviewed as part of Q2 review meetings  Contract review meetings will drill down into forecasts for Q3, year-end and end of programme  On-going – Ensure IMS forecasts are kept up-to-date across  Avoid delayed/late claims and adequately resource IMS processing

Affordable Homes Programme 2015–18 What do we know so far?  Affordable Rent and affordable home ownership  Resource available  Something for something  Timetable: –Prospectus December 2013 –Bids April 2014 –Allocations July 2014  Still questions to resolve

Affordable Homes Programme 2015–18 Governance:  DCLG project board –eg specific needs groups –London split of funding –Role of standards?  Affordable Rent to Buy  HCA project board –Focus on operational and implementation matters –Key outputs: Prospectus; assessment metrics and manual; suite of reports; IMS and data requirements; standard form contracts.  Feedback from Lead Negotiators  DCLG and HCA approvals process  Take past performance into account in assessment

AHP – lessons learned?  4 year programme – but annual delivery  Programme vs scheme approach –Indicative allocations –Allocate whole programme at outset? Known delivery Cross subsidy/conversions Procurement efficiencies  Average payment rate vs scheme grant rate  Encourage investment partnerships/non- developers access to capacity

AHP – lessons learned?  Geographic split?  S106 – housebuilders/recipient RPs  Blank sheet or take account of previous delivery?  Speed of contracting  Data collected

Tackling build cost  Smarter procurement  Intelligent clienting  Standardisation  Building Information Modelling (and Management)

Conclusions  Public finance remains constrained; complex and challenging operating environment  Housing, land and construction as key drivers of local economic growth  Budget and SR builds on success of existing programmes  Recognition of both sector role and HCA investment, commercial expertise and regulation role in delivering successful places with homes and jobs  Delivery! Delivery!! Delivery!!! We are innovative, flexible and commercial in our approach to delivering public value and responding to challenges.

Questions