Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by The Places for People Group (AFH 26)


  The Places for People Group owns and manages 55,000 homes across the UK and provides affordable housing, housing for sale, housing with care and support, market rent and a series of regeneration products—childcare, employment and training and financial inclusion programmes through the Group's regeneration arm.

  The Group welcomes the opportunity to provide evidence to this very wide ranging and important inquiry. Our evidence is focused on the following:

    —  the scale and location of demand for affordable housing;

    —  the quality of affordable housing and creating mixed tenure; and

    —  the policies and practices needed to facilitate the increased supply of sustainable housing in areas of demand.

  These are drawn from the sub-committee's indicated areas of interest.


  Household projections based on 1998 figures from the Governments Actuary Department and past trends in household formation, suggest that between 1996 and 2021, England will need accommodation for an extra 4.3 million households. This makes no allowance for new homes needed to meet the backlog of existing needs for groups (temporary accommodation, concealed homeless/sharing, hostel residents etc). In 1996 this was estimated at 650,000 households. It is unlikely this figure has declined.

  Given the current output from the building industry and from affordable housing providers it is clear a gap exists now and will further develop in the next 20 years to just over a million homes, due to a shortfall of output from a required demand of some 56,000 homes a year. This is concentrated in particular areas:

    —  within London's travel to work areas, as well as rural areas within travel to work reach of other major centres;

    —  70 per cent of the population growth is in London and the South of England but only about 50 per cent of house building takes place there; and

    —  the London Mayor's Housing Commission estimated 28,000 affordable homes for key workers and low income households were needed but only 2,743 such homes were built in 2000.

  This regional dimension to the UKs housing problems cannot be categorised as a movement of population from the North and Midlands to the South. Only 8 per cent of the growth in household numbers in Southern England is due to net internal migration from the North and Midlands.

  The low housing demand experienced by the older industrial cities in the North and responses to the process of reversing this decline was well documented by the report of Transport, Local Government and Regions Selection Committee on Empty Homes. The Places for People Group gave oral evidence to the Committee and welcomed many of its recommendations, particularly the Pathfinder Projects announced by the DLTR to tackle low demand. We would hope that the conclusion of this inquiry recognises the differing investment needs and approaches required in some regions of the North and Midlands and that recommendations will integrate with those of the Empty Homes Report.

  House prices and market rents would be affordable to a higher proportion of the population if there was a better balance between supply and demand. Otherwise, even if incomes are increased or purchasers given special grants, then the cost of each house will simply rise further, as there is the same number of homes to go round. The danger of the Starter Home initiative—without an increase in the total number of homes—will mean they will displace those slightly better off. In any case the amount of resources allocated to the Starter Home initiative will only scratch the surface of the problem of housing and key workers. The fundamental problem is one of under-supply of housing of the right type, size and cost in the right places.


  The Group believes that current policies and Housing Corporation grant rates and standards do not encourage quality mixed tenure neighbourhoods. To achieve this the development of schemes should ensure that the appearance and design standards for affordable homes should be the same as other tenures particularly owner occupation. This will require different approaches than currently undertaken by RSLs and developers. By having a building for sale subsidiary within the Places for People Group and a series of specialist providers the profit gained from development activity can be committed to the long-term investment of the neighbourhood and to cross-subsidise affordable housing.

  To illustrate this the Group have agreed a development in Hertfordshire with Three Rivers Council and in Chilwell Gardens Developed by our for sale arm, Emblem Homes, this provides:

    —  120 homes with 35 per cent affordable and key worker homes pepper potted throughout;

    —  flats and houses for sale; and

    —  a respite scheme for people with learning difficulties and a nursery facility.

  The cross subsidy from the sale of homes allows the Group to provide the nursery facility and a greater balance of affordable homes than a developer would offer plus the design and quality standards being the same throughout the scheme. The affordable houses are indistinguishable from the houses for sale.

  This is an example of maximising value, a one stop approach and ensuring social inclusion. The scheme would not have been possible under the current funding arrangement to RSLs. However, the extra specialism, companies and resources brought by the Group's structure delivers a better value scheme for the local authority and creates true mixed tenure. This is a model that can be replicated.


  The Report of the Urban Task Force stressed the need for quality and innovation in design by increasing density, reclaiming and re-using urban land and the need for redevelopment of "unloved" social housing estates to "intensify" development as well as create facilities that sustain the place and neighbourhood.

  The Places for People Group believe that quality design in the right context—urban, town extension, rural is crucial for the long term sustainability of affordable housing. Our recently published "Design Guide" sets down the following principles:

    —  identifying and understanding the context of an existing community and a visioning exercise of how a future community will work;

    —  building on and working with existing local facilities and the potential for developing new, more sustainable, facilities and services. These would include, for example, not only open space and play creation but also opportunities for renewable energy sources, sustainable food production and more local employment;

    —  understanding and assessing local landscape features and heritage;

    —  continuing the involvement of all local stakeholders in the design and implementation of the development;

    —  creating and maintaining of strong partnerships with all agencies responsible for the planning and implementation of the project;

    —  using sustainable materials during the construction process; and

    —  reducing materials waste and waste of operative time during the construction phase.

  We believe that a focus on quality design, clearly specified with its correct application in individual neighbourhood context is vital for future affordable development.


  Although new homes are better sited on brownfield urban sites, as far as possible, there must be acceptance that not all of the homes can be built on recycled land. To realise the 60 per cent target of development on brownfield sites, over 1.5 million more homes will need to go on greenfield land over the next two decades. The Group believes this can be best achieved by a combination of:

    —  high quality and high density homes in urban areas, with a true mix of tenure and that link in with transport infrastructure. However, the opportunity to develop such sites in London particularly is dependent on complicated site assembly and very competitive land acquisition focused on capturing high house prices;

    —  in high value areas intermediate housing markets will be required to provide affordable homes for lower and middle paid staff. Such homes are likely to be based on equity share rather than rented tenure. To illustrate this the Places for People Group have devised an equity share model which defrays the profit at point of sale. Together with a smaller Housing Corporation grant this would reduce the cost of £100,000 homes, for example, to £75,000 which could be split between rent and equity-share. Flexibility would be applied dependent upon individual circumstances which would determine the split of rent/equity;

    —  new types of regeneration agencies are needed to deal with strategic use of land within a national structure for strategic land assembly. These will have clear social objectives, a strategy which emphasises long term investment rather than the short term profit. They will have power to invest over the long term and to take long term commercial risk and be credible partners financially, to local authorities and with the community. We believe some RSLs, like ourselves are well placed to be a model for the development of this investment agency;

    —  the Places for People Group comprises of:

      —  four general needs Housing Associations providing affordable housing across the UK—NBH, a national RSL, Bristol Church HA, Edinvar HA, Edinburgh, Capital City Homes, Edinburgh;

      —  two specialist Housing Associations—New Leaf, providing care and support; Kush, meeting BME needs in North London;

      —  blueroom—providing market rent to subsidise core housing activities and to extend the range of tenure opportunities;

      —  Emblem Homes—developing houses for sale to ensure mixed tenure and enable cross subsidy in schemes to increase the amount of affordable housing that can be provided; and

      —  JVCo—is the group's regeneration arm which provides nurseries, employment and training, community banking and other partnerships which add value to housing and regeneration.

  This combination of specialist companies working together provides a one stop shop for local authorities as well as public and private partners to facilitate sustainable regeneration. It enables true mixed tenure—market rent, affordable homes, for sale and key workers accommodation—together with community facilities that make places work. The key point is that the Group captures value—by recycling profits from housing for sale and market rent into provision of affordable homes and community facilities. By removing the need for a private sector developer, what would have 15-20 per cent of profit for developers/shareholders can be converted by the Group into affordable housing and regeneration activities that benefit the community and its long term infrastructure;

    —  development of urban extensions allow significant gains in scale—often several hundred homes of mixed tenure—and these can integrate with existing, schools, shops, facilities whilst reducing traffic congestion. This approach lends itself to master planning together with a regeneration agency which focuses on the wider aspects of making a place sustainable and affordable. This could avoid the needs for dozens of harder to develop smaller schemes or free standing communities in rural areas with associated adverse environmental impacts. Although it is our view that some new settlements will be required on land currently in the green belt; and

    —  consideration should be given to changing the power of Registered Social Landlords to allow them to build houses for sale and to use the profits to create affordable homes and sustainable infrastructure. Whilst we appreciate this would be applicable to those with the strongest risk management framework and financial capacity, it would produce increased resources for affordable house/key workers. The only alternative is as we have done, establishing a subsidiary which brings its own complexities in terms of raising investment and security.


  Our final point confirms the critical issue of land release and assembly. In London and the South East, the difficulty of meeting demand is hampered by the difficulty of acquiring land, its high costs and the ability to assemble sites. There is no fastrack way of doing this currently and clear change is required. We would recommend:

    —  firstly, the establishment of an agreed structure for dealing with land assembly. These should be based on a Community Land Trust model to establish land banking. This should not be left to the private sector as this will not unlock sites for affordable homes development;

    —  secondly, grants should be available to RSLs at the beginning of the process to assemble the site rather than at the end of the development process. This will entail a different way of developing but through this approach, will start to ease the difficulties with land assembly; and

    —  it is inevitable that to achieve the scale of affordable homes required, there will have to be development of greenfield sites. This should be done preferably through town and urban extension. Whilst we support the recycling of brownfield sites, the process of unlocking them—even if it is speeded up—will still not meet the overall requirements.

  We believe the Places for People Group will be able to contribute more effectively if these reforms are considered. With a range of specialist skills in the Group and the ability to manage land banking and masterplanning, it would mean we would be able to maximise investment in affordable housing and sustainable neighbourhoods.

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