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Building a new generation of council housing 30/05/2019 Labelled as Development

Prime Minister Theresa May promised "a new generation of council housing" and followed this up by announcing the intention to scrap the Housing Revenue Account borrowing cap - a promise subsequently delivered in the 2018 Autumn Budget.

 

In the first of a series of short articles outlining what this means for some of our member councils, our colleagues at Luton Borough Council summarise what the scrapping of the HRA borrowing cap means for their council and how they intend to use the new borrowing freedoms.

 

Patrick Odling-Smee, Service Director of Housing at Luton Borough Council writes:

 

"This year we mark 100 years since the Addison Act 1919, the legislation which paved the way for large-scale council housing.

 

Since that date, hundreds of thousands of homes have been built across the country. Not just for the returning war heroes who provided the motivation for the Act, but for individuals and families of all backgrounds.

 

But this Act was not just about bricks and mortar; it was about creating communities and decent homes.

 

A century on, it feels fitting that local authorities are now able to set in motion new plans to step up their homebuilding activities. Having received the announcement from Theresa May last September, we can now begin to see the shape of things to come here in Luton.

 

The prime minister told the Conservative Party conference in Birmingham that housing was 'the biggest domestic policy challenge of our generation', but that local authorities were being held back from building by fiscal rules. She said the government would scrap the current cap on how much councils could borrow against the value of their housing stock, which was implemented in 2012.

 

For us here in Luton, the challenge has always been about more than investment alone.

 

We are lucky enough to havesignificant funding sources available to us but the lack of land availability, our relative inability to unlock this land without associated risks and perceived land value has proved a significant obstacle.

 

Add to this the fact that the local market is not as attractive for shared ownership and outright sale opportunities, meaning registered providers are increasingly apprehensive about new developments.

 

We also have shortages in resource and skills in our housing development and planning department.

 

So here in Luton, we plan to use the new borrowing freedoms for land acquisition wherever possible and the development of affordable homes. Our strategic targets include delivery of 3,500 homes, of which 700 are affordable homes, by 2022.

 

To address our staffing shortages, we plan to work in partnership with our registered partners other partners and make sure that the skills are transferred to our in-house team.

 

Luton is one of the few councils in the country that have our own in-house building team - BTS. They have already completed over 14 new homes for the HRA and they are on site with another 27 more. They have particular skills in developing smaller infill sites on existing estates.  We will be using them to build new HRA homes on smaller sites in the town.

 

To date we are proud to be able to conclude two of our larger HRA developments in Marsh Farm costing £32 million, comprising:

 

  • 11 houses (ready for let in Sept 19) and 83 flats (ready for let in February 2020) and
  • Roman Way costing £4 million for 20 units including 3 bungalows also nearing completion by this summer July 2019.

 

We also have two emerging sites a total cost of £15 million going in for pre-planning applications that will supplement our Marsh Farm delivery with a further 50 units.

 

The next five years will see a significant investment of £75 million to continue to pursue our targets for Luton residents who:

 

-         currently have incomes that mean they can afford only 10 per cent of the average house price in Luton and are increasingly locked out of Luton's housing market

-         are struggling to save for a deposit or to pay their rent

-         in the case of, parents fear that their children will be unable to set down any roots in the town they grew up.

 

We understand that moving towards these targets may require a fundamentally different approach to homebuilding.

 

Our new Housing Strategy sets out plans to diversify our homebuilding approach and build more socially rented and other genuinely affordable homes.

 

Reviewing council-owned land, working with partners to find new uses for surplus student accommodation and seeking opportunities for partnerships with investors and developers to make full use of borrowing headroom are just some of the ways we hope to deliver these ambitious targets."

Marsh Farm Centre Regen 9 May 2019 2 P3110218

Purley Centre Demolition 2

 

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