At the North London Housing & Regeneration Conference held on November 11, the 140 delegates listened to a range of speakers focussing on the present challenges in regeneration delivery, and the substantial opportunity in North London.
David Lunts, Interim Executive Director of Housing and Regeneration at the Greater London Authority gave a deep insight into the London housing market. There has been a collapse in housing transactions, and a disappearance of first time buyers, he said. This has helped bring about a decline in the proportion of homes occupied by their owners, and a rise of the private rented sector.
Interestingly, he highlighted a significant growth in overseas investment in London housing – with funds coming from overseas increasing by +60% over the past year, while investment funds from the UK have fallen 30%.
He also pointed out that while there are a substantial number of consented housing units in London – nearly 200,000 – over half are in East London, and may have questions over their economic viability, especially with housebuilders now focussing on margins rather than volume.
David calls this situation “The new norm”, indicating we can expect the present economic conditions to prevail for some time.
However, he said that some key policy changes – around affordable rent, welfare reform, and localism – coupled with a central government desire to take a back seat on physical regeneration, and the fact that London will be largely free to forge its own destiny from April 2012 set up not just challenges, but opportunities.
He outlined a number of particular challenges for London – delivering the Affordable Rental model by 2015, defining the new planning landscape, HRA reform
He picked out opportunity in the provision of new housing products for those who can’t buy, but aren’t a social rent priority for local authorities – a “Rent to buy” product. The prospect of institutional investment in the private rental sector, the freeing up for development of surplus public land, and the streamlining of development partner procurement as all offering the chance to move regeneration forward.
Money’s too tight
With money tight, there was no surprise that a significant portion of the discussion focussed on finding and liberating funding for regeneration.
Stewart Murray, of LB Redbridge, said now was the time “to be brave”. He saw opportunity in using assets more effectively. He pointed to the many different ways of raising funds which could be targeted at regeneration activity – S106, CIL, TIF, and so on, and said that monies from these models should be collected together, and used in a targeted way local solutions, tailored to unlock growth.
In particular, he advised keeping the CIL structure simple. The real win, he said, was to capture funds from smaller developers, and this would only happen with an easily understandable system perceived to be locally fair.
Nick Salisbury of Barclays said that lending remains tight, and debt is more expensive than before. The challenge, he said, was to generate income through regeneration to finance debt. He also said banks were more likely to lend to those who can demonstrate liquidity, certainty, character & integrity, offer equity, and employ a contactor with a strong balance sheet. He said he was pleased to see more public/private partnerships, and that he felt the LABV model can work.
He also felt the councils need to work hard to help derisk projects through underwriting them, or by providing anchor tenants through committing to space in future developments.
Waqar Ahmed, of London & Quadrant, made the point that Housing Associations and other Registered Providers were excellent partners in regeneration projects as they can typically meet the lenders requirements and borrow. The history of the sector is of borrowing and successfully repaying, RSLs have good credit ratings and can deliver, he said. He also thought that the debt capital market is one which can be easily accessed by RSLs.
Further, he felt that Housing Associations “are the best developers” – that their long term outlook made them ideal partners in placemaking.
North London Opportunity
Delegates were treated to a spin round some of North London’s key opportunities. In Walthamstow, Steven Boyes showed how the Arcade site, and the former greyhound stadium provided a substantial opportunity to lift the town centre. While the Walthamstow Wetlands – London’s largest expanse of water – could provide amenity as well as space for homes.
Blackhorse Lane and the Northern Olympic Fringe are also significant opportunity areas in Waltham Forest, where the council has determined that the majority of new housing can come from small sites.
In Enfield there Sharon Strutt talked about five key areas, Southgate, Edmonton Green, Ponders End, Meridian Water, and Enfield Town. Developments are under way, and there is potential for more.
Enfield has worked hard to derisk development. At the Ladderswood Estate, they have ensured early decant and leaseholder buybacks to provide a lower risk development for the developer partner.
Similarly at Highmead they have secured vacant possession of homes and shops and submitted a planning application to pave the way for easier redevelopment. At Meridian Water, they are investing in an important rail connection and in flood protection measures.
Over in Haringey, the Heartlands project has approval, and Hornsey is coming forward, but the real story is in Tottenham, said Lyn Garner, where the Northumberland Park project could provide 2500 new homes around a new Spurs stadium. The project is about much more than a new football ground.
Down the High Road, Wards Corner remains an opportunity, and plans will be coming back to the planning committee in the next few months, despite an earlier setback. The council remains committed to working with developer partner Grainger on a redevelopment of the site.
In Hackney, the third densest London Borough by population, Graham Loveland talked about the target to deliver 1000 new homes a year. The Olympic “host borough” status, and the location on the City Fringe, and under the likely Mayoral Development Company would help, as will the infrastructure – with four overground stationsand upgrades to various aspects of transport delivered around the Olympics.
There is an Area Action Plan in place in Dalston, and work is progressing on Hackney Central, Hackney Wick, and Shoreditch (with the Tech City project aiming to drive a new creative economy).
At Woodberry Down, an estate with 2500 units largely in slab blocks, there are plans for 4600 homes. These are mostly affordable, and will be provided through a JV with Berkeley Homes, and a partnership with Genesis. 2000 units are consented, and the partners are now reviewing the masterplan to see whether it is still the most appropriate. Berkeley are discussing a second tower – after the first one sold completely off plan, including a £1m top floor flat.