Future of London presentation

Future of London8 October 2009Delivering Housing Projects in the Current Economic Climate – An HCA London Perspective : 

Future of London8 October 2009Delivering Housing Projects in the Current Economic Climate – An HCA London Perspective David Lunts, London Regional Director Homes and Communities Agency

This presentation: : 

This presentation: What we’ve been doing How we’re doing Future challenges

Slide 3: 

London recorded house sales (end 02-08)

What have we done? : 

What have we done? Flexible grant rates Tailored packages New intermediate products (HBD; Up2U; rent to homebuy) Help with land purchase ‘Kickstart’ and the new stimulus package Using public land for new models (inc. the public land initiative) Moving from grant to equity Looking for new investors – the Private Rented Sector Initiative Sustainability – Low Carbon infrastructure; SHESP; new design standards The single conversation Keeping things moving: Developing new approaches:

How are we doing against the Mayor’s targets? : 

How are we doing against the Mayor’s targets? As at end August 2009

Future programme profile 09/14 : 

6 Future programme profile 09/14

Slide 7: 

London Kickstart Keeping projects alive

Kidbrooke (Greenwich) : 

Kidbrooke (Greenwich)

King’s Cross : 

King’s Cross

St. Andrews (Bromley-By-Bow) : 

St. Andrews (Bromley-By-Bow)

Hale Village – Haringey : 

Hale Village – Haringey

Woodberry Down - Hackney : 

Woodberry Down - Hackney

Woodberry Down - Hackney : 

Woodberry Down - Hackney

Clapham Park - Lambeth : 

Clapham Park - Lambeth

New intermediate offers : 

New intermediate offers

Slide 16: 

Future challenges: Strategic choices & tensions 1. NEW HOUSING SUPPLY 2. AFFORDABILITY 3. QUALITY OF PLACE/TACKLING DISADVANTAGE 4. SUSTAINABILITY

Strategic choices – new supply : 

Market completions have risen faster and higher in London than nationally But this was sustained by heavy reliance on smaller flats and pre-sales (c65% of total new build) Loss of capacity will prevent rapid recovery across sectors Strategic choices – new supply

TSA predictions of annual capacity for new development : 

Source: TSA 2009 RSLs are expecting serious loss of capacity TSA predictions of annual capacity for new development Strategic choices – new supply

Strategic choices - affordability : 

Strategic choices - affordability Real house prices have risen by more than 400 per cent in a generation

House price to income and deposit ratios (London) : 

House price to income and deposit ratios (London) It’s never been harder to be a first time buyer

Which is why there are less of them... : 

Which is why there are less of them... A couple on lower quartile incomes in London need to save more than a year’s pay to meet the deposit on a home

And the need for social housing is growing : 

And the need for social housing is growing London’s waiting lists have increased by nearly 80 per cent over the last 10 years

Inter- and intra-regional variations in deprivation, 2007 : 

Source: 2007 Index of Multiple Deprivation, CLG (2009) Strategic choices - quality of place and life chances Inter- and intra-regional variations in deprivation, 2007 London is the most unequal of all the English regions

The Carbon Challenge(East London Heat Network) : 

The Carbon Challenge(East London Heat Network) 120,000 homes 100,000 tonnes annual CO2 Achieving an 80% reduction in greenhouse gas emissions by 2050 will require emissions from households to be minimal

What have we learned? : 

What have we learned? Recessionary models have to be different Problems are structural and cultural as well as cyclical Equity models and a long term view of investment are essential Public land can be key – and likely to remain so S106 expectations have to change ‘Total place’ investment will become more important Long term residential investment models may be viable and could benefit occupiers, funds, communities and the wider economy We need more flexibility to deliver solutions for local conditions – London isn’t a homogenous market

What’s next? : 

What’s next?

Slide 27: 

Cuts in capital programmes – pressure on VFM will grow Development & mortgage finance will remain tight Signs of recovery, but market conditions will remain fragile Mixed use, regeneration and high density especially challenging Intermediate and FTB products more significant? Institutional change? Strategic partnerships more important – especially on public land? Pressure will grow to retrofit for climate change Institutional investment in residential may become viable – but only in certain locations Supply/demand and affordability fundamentals remain and can’t be ignored by government