Providing homes to meet local needs - examining the challenges to delivering affordable housing in the South West - www.curo-group.co.uk
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Providing homes to meet local needs – examining the challenges to delivering affordable housing in the South West Gerraint Oakley – Managing Director Curo Homes www.curo-group.co.uk
Strategic Priorities
• Creating a renowned customer service culture
• Owning great properties and places
• Setting up an ethical care and support
business
• Working for happy, safe, popular
neighbourhoods
• Helping people who need work
• Lobbying for positive social change.
Operating Area
12,373
properties
8,818 2,032 1,097 426
general Supported Leasehold shared
needs housing homes ownership
You know the context…
The new normal…
• Loss of traditional funding sources
• Tough economics…tough impact
on people
• Welfare Reform changes
• Less capital subsidy
• Less security of tenure
• The merging of the rented sector
The Internal Context Objectives • To create a robust business capable of producing major annual profits within five years • To produce returns on capital commensurate with the best in the industry • To provide value for money, quality homes in keeping with the groups reputation • To establish processes and controls in line with best practice to maintain a risk averse approach for the business • Contribute new opportunities for the group as a whole
The External Context
Housing needs – UK
1981 2001 2011 2013
Completions 200,000 130,000 100,000 107,000
Births 670,000 600,000 720,000
Needs – 240,000 per year
The External Context
The External Context
The External Context
The External Context
House Price News June 2014…
…Same Week
What the government says • Governor Mark Carney, Chancellor’s Mansion House Speech and Financial Policy Committee (FCP) all given prominence to mortgage and housing markets. • Governor and Chancellor have stressed that the housing market poses no immediate threat to the economy. • Mortgage Market Review (MMR) on 26th April has impacted on mortgage lending, and therefore on housing demand.
What the industry says • Home Builders Federation (HBF) message that the only long-term solution is to build more homes is now accepted by politicians • Focus on house building intensifying as we near the election • House builders need medium term stability in order to properly plan and execute the expansion of their businesses. • House builders would much prefer a stable market than a boom followed inevitably by another downturn.
House Price Inflation
• RICS are predicting average house prices in the South West will increase
by 7% per annum to 2020.
• Savills are predicting house prices in the South will increase by 21% by
2020, which is broken down by the following annual increases:
• 2014 – 4.0%
• 2015 – 1.0%
• 2016 – 4.5%
• 2017 – 5.0%
• 2018 – 5.0%
• Potentially see bigger increases in urban prime areas (Central Bath) and
equity rich areas (West Somerset)
• Review of current House price index’s (from HCA)Average Values for Bath Source – Zoopla – June 2014
Average Values for Bristol Source – Zoopla – June 2014
Annual Price Change by County
Land Prices
Strong demand for a limited pool of sites continues to drive land price growth.
National greenfield development land values, excluding London, increased by 7.5% in the
year to March 2014. Urban land values grew by 6.4% over the same period.
Source – Savills Research – June 2014Our approach…
• New approach adopted in 2013:
• We think about the “uncertainties that matter”
• We think about the opportunities as well as
threats
• We focus on the key risks at meetings
• We sync risk process in development,
programme management and strategic risk
managementCuro Homes • Curo Homes will focus on the delivery of good quality, well-designed homes forming inclusive communities that are sustainable; in which we remain active and committed. • We’ll build integrated communities in which Curo provides support, and enables community growth and inclusion. • Curo Homes will design homes around well-planned and carefully laid out public open space that is fit for purpose and provides the community with practical, safe spaces and well integrated facilities.
New Homes Delivery
House Units
PRIVATE FOR SALE 2015 2016 2017 2018 2019 2020
Foxhill - private 0 0 9 81 86 82
Maynards - private 0 16 0 0 0 0
Unsecured - private 0 20 118 169 164 168
Total Private Sales 0 36 127 250 250 250
SOCIAL SALES
Foxhill - Affordable 0 0 12 42 31 46
Maynards - affordable 0 19 0 0 0 0
Unsecured - social 0 22 44 58 69 54
Total Social Sales 0 41 56 100 100 100
700
TOTAL UNITS 0 77 183 350 350 350
600An integrated community
Mulberry Park
Mulberry Park
What is Next? • Working in Partnership – LAs, LEPs, RPs, House Builders • Empower RP’s to be more flexible/imaginative • Growth of private rented market – and predicted >50% homes privately rented by 2030 • Challenger house builders • Developing capability, resources and skills
Questions
Contact
Gerraint Oakley
Managing Director, Curo Homes
01225 366404
07964 372403
gerraint.oakley@curo-group.co.uk
@gerraint
Gerraint OakleySector Risk Profile (1) 1. Asset-related risks; • Development • Diversification • Exposure to housing market • Maintenance of existing stock 2. Liability-related risks; • Existing debts (loan covenants and re-pricing) • Mark-to-market exposure • IFRS • New forms of debt
Sector Risk Profile (2) 3. Income-related risks • Affordable rent • Welfare reform • Supporting People 4. Cost risks • Pensions • Differential inflation rates
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