North Kesteven District Council adopted an ambitious programme of council housebuilding in the early/middle part of the decade.
North Kesteven District Council adopted an ambitious programme of council housebuilding in the early/middle part of the decade. This was based on the positive feedback from a pilot programme. However, changes in government policies necessitated a rethink that has led to a much reduced target focusing on one-to-one replacement of properties sold under right to buy (RTB). However, the council is relatively optimistic that alterations in national policies announced in autumn 2017 may open up the possibility of extending the current programme.
Context
North Kesteven District Council is a rural authority in Lincolnshire comprising a market town (Sleaford), part of the Lincoln urban area (North Hykeham) and many villages. It has a stock of over 3,600 council houses. There are more than 1,500 households on the housing register.
Strategic planning is undertaken by the Central Lincolnshire Joint Strategic Planning Committee that was set up in 2009 and covers Lincoln and West Lindsey as well as North Kesteven. A local plan for central Lincolnshire was adopted in 2017. This highlighted that there has been a significant growth in new housing over the last two decades, fuelled in part by major urban regeneration projects in Lincoln (as part of the national growth point policy in the 2000s). The linked strategic housing market assessment indicates that there is a need for over 17,000 new affordable homes by 2036.
North Kesteven District Council’s corporate plan for 2018-2021has, as one of its priorities, to “promote housing growth that meets current and emerging needs”. There are, however, many challenges in delivering affordable housing. The previous corporate plan had set a target of delivering 500 homes over 10 years through a council housebuilding programme. Government policy changes on rent setting and welfare have resulted in a rethink. The council’s new build programme now focuses on replacing properties lost through RTB on a one-for-one basis. It is estimated that 25 replacement properties per year are required. The more ambitious programme of 500 new homes over 10 years will be delivered through a council-owned housing company.
Council housebuilding
Following the self-financing settlement in 2012, with its assumed stable external environment, North Kesteven developed its ambitious council housebuilding target. A pilot programme was designed and implemented. This resulted in 134 properties being built on 26 sites by 2015. They were let at affordable rents. They were mainly developed on small infill sites on existing estates held in the HRA or on undeveloped land owned by the local authority. There had previously been little interest in this type of location by private housebuilders and housing associations.
This pilot programme was deemed to be a success in terms of the quality of the homes, the positive views of the new tenants, the use of neglected sites and the build-up of staff expertise and knowledge in the direct delivery of new properties. Councillors, therefore, strongly endorsed the more ambitious programme.
However, as has already been pointed out, Government policy changes have resulted in a revised approach concentrating on one-to-one RTB replacements. Nevertheless, the lessons from the pilot programme enabled the council to take forward the idea of a local housing company (LHC) relatively quickly.
Funding
The council has utilised a number of funding streams, including:
• HRA reserves
• HRA headroom borrowing cap
• commuted sums through Section 106 agreements
• Homes England (HCA) grants.
In addition, use is made of Government and HCA (now Homes England) funding on infrastructure to open up strategic sites, such as £2 million through the housing infrastructure fund for West Sleaford.
Quality
A major feature of the council housebuilding programme has been an emphasis on high-quality provision. North Kesteven has adopted a specific standard – the ‘fabric first plus standard’. This focuses on, for example, thermal efficiency, well-designed homes (space standards and layouts, for example) and affordable to live in (low running costs).
There are, however, challenges in adhering to this standard, as increasingly the council is using a purchase and acquisition approach. This involves buying back former council properties that were previously sold under RTB and purchasing properties from housebuilders under planning agreements. The former may require significant modernisation work to bring them up to the desired standard, which may affect the viability of purchasing them. The latter may simply not meet the high standards set by the local authority.
Challenges
The reason for the growth of interest in purchase and acquisition is twofold. Firstly, it is quicker than going through the development process. Secondly, there are now fewer infill sites available. The council is investigating and using other approaches to tackle the shortage of sites. These include buying land and negotiating with developers and land owners on joint deals that involve part of larger sites being used for council housebuilding. Buying land is proving to be difficult, as the rise in land prices makes viability of individual schemes challenging. Furthermore, the lack of a large programme prevents the adoption of a strategy that focuses on overall, rather than individual, site viability
Moving forward
The council is optimistic that its overall programme can be delivered by the LHC and council housebuilding. It is also hopeful that changes in Government policies will enable a larger programme of direct provision. The commitment to a new rent setting policy in autumn 2017, together with the increase in affordable housing funding and the bidding round for individual headroom borrowing capacity, are considered to be positive features.