2010 has been a busy year for the HCA, according to David Lunts, London Director of the Homes & Communities Agency, who spoke at the Place West London economic summit on October 14. “We’ve been investing in housing and regeneration, keeping developers busy”, but the HCA are not in a position to forward fund any starts until the budget allocation is revealed in the Comprehensive Spending Review (20th October 2010).
David Lunts spoke hypothetically about what would happen if the CSR announced cuts of 30%, he stated “This would be just about be the level at which we could still provide funding for existing commitments but it would mean that there would be no funding left over for any new starts next year.” He added that the HCA provides funding for 70% of new starts so it offers important support for keeping things going in this market.
David Lunts said of the current market: “People need to adjust their expectations and anticipations because although house prices in London have been rising year on year by 10%, there is a risk that they may fall again next year. As well as this, mortgage lending will remain low and so the market will continue to be shaky.”
“The new emergence of localism will ultimately change the climate, the culture and the way in which we do business. Therefore value for money and efficiencies are becoming more and more important as funding becomes increasingly difficult to gain due to pressures” added David.
Speculating on what is next, David said: “Home ownership will remain important but will be different and may decline in London. This reveals important opportunities for long term institutional funding models.”