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How councils plan to build a way out of the COVID-19 crisis

Inside Housing’s reporters talk to four councils across Britain to find out how the pandemic has impacted their housebuilding plans – and how they hope to get building again

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How councils plan to build a way out of the COVID-19 crisis – @jester @NatBarkerIH @luciemheath and @dominicbrady8 talk to @LeedsCC_News, @GlasgowCC, @NorthamptonBC and @wfcouncil #ukhousing

How can councils continue to build the homes that their residents need, in the face of a pandemic and economic contraction? @jester @NatBarkerIH @luciemheath and @dominicbrady8 talk to @LeedsCC_News, @GlasgowCC, @NorthamptonBC and @wfcouncil #ukhousing

Councils across the UK are facing a dilemma: how to continue to build the homes that their residents need, in the face of a pandemic with no end date in sight, and a gigantic economic contraction.

Inside Housing spoke to four councils across the UK, of different political stripes, in very different circumstances, to find out what they are planning to do.


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Leeds

Dominic Brady

Leeds 2

This new development in Holbeck, in Leeds’ inner city, is part of one of the largest private finance initiatives in the UK

Last year, Leeds City Council set itself the ambitious target of building 1,500 new homes over five years and, despite all the disruption brought by COVID-19, the council remains confident that this target can still be met.

“In broad terms, we are still progressing well and we would expect most of those to be completed by 2023/24,” explains Mark Denton, its head of council housing growth.

“We only have one scheme on site at the moment, which has managed to keep going and hand over properties”

He adds: “We benefited from the fact that a lot of our stuff is at the pre-planning stage. We only have one scheme on site at the moment, which has managed to keep going and hand over properties.”

The limitations around construction during lockdown has meant the council has focused its attention on other areas – for example, the design phase of development.

Mr Denton explains that contractors’ design teams have spare capacity and Leeds has taken advantage of this by commissioning design feasibility work.

“We took the view that we should use the down period to develop the design so that once we get to a point where construction can begin again in earnest, we are ready,” he says.

Leeds 3

The Wharfedale View extra care scheme opened in 2016 and is managed by council

Neil Evans, director of resources and housing at the council, says the authority’s role in providing social housing is vital at times of economic growth and will become even more important with the “less buoyant” economy expected from the fall-out of the COVID-19 pandemic.

One way the council will look to get development up and running again post-coronavirus is through joint working with developers.

“As we emerge from this, we will look at opportunities to work with developers to find additional land,” says Mr Denton.

He also hopes for more joint working with central government and notes that engagement with Homes England and the Ministry of Housing, Communities and Local Government has improved, and says “hopefully that will bring resources into areas that need affordable housing”.

Glasgow

Lucie Heath

Glasgow 2

Glasgow City Council is planning a £25m redevelopment of Custom House Quay on the banks of the River Clyde

COVID-19 has arguably hit housebuilding harder in Scotland than anywhere else in the UK. In contrast to Westminster, the Scottish government ordered that all ‘non-essential’ projects, including housebuilding, fully shut down. Sites only started the process of reopening in June.

The shutdown has led the Scottish government to announce that it will miss its target to deliver 50,000 new affordable homes by 2021. Glasgow City Council tells Inside Housing that the impact of coronavirus means its own target of delivering 7,500 homes by 2022 may have to be stretched beyond that deadline.

“The market is still there, the money is still there, the sites are still there. If it’s affected by COVID-19, we hope that any reduction in investment will be a bump in the road, rather than a long-term effect”

As a stock transfer council, Glasgow will have to work closely with the 68 housing associations within its region to ensure affordable housing delivery continues post-pandemic.

Patrick Flynn, head of housing and regeneration at the council, says discussions have taken place over funding housing associations to make off-the-shelf purchases from developers, however the feedback he is receiving is that developers remain positive that they can sell.

Another idea being floated with the Scottish government is an extension of its Mortgage to Rent scheme, which allows social landlords to buy the homes of those who are struggling to pay their mortgage and rent it back to them.

Glasgow 3

The council is part of a £120m partnership to regenerate the Laurieston area

Despite the challenges, coronavirus has not slowed down the council’s ambitions. Earlier this month, it approved a new strategy that will see the city centre double in population to 40,000 by 2035.

Mr Flynn admits “nobody knows” yet what the longer-term impact of the lockdown will be. However, he does not believe it will have a big impact on the strategy.

“We want to double the population of our city centre and we’re willing to take a long-term view on that but we will make it happen,” he says. “Housing is still seen as an attractive home for sovereign wealth and various other institutional funds, and we as a city want to make sure we can access that the same as other cities have.”

“The market is still there, the money is still there, the sites are still there. If it’s affected by COVID-19, we hope that any reduction in investment will be a bump in the road, rather than a long-term effect.”

Northampton

Nathaniel Barker

Northampton 2

Lakeview House was opened last year and provides 45 accessible council homes managed by Northampton Partnership Homes

Northampton Partnership Homes (NPH), an ALMO managing 11,500 homes on behalf of the Conservative-run council, has not let COVID-19 dampen its ambitions.

In May, it published a new development strategy sticking with a previous pledge to build at least 1,000 homes over the next decade, but also expressing for the first time “an aspiration to achieve over 3,000”.

The nature of the ALMO’s approach to housebuilding – entirely on brownfield sites and juggling multiple strategic objectives of the council – means it is used to facing “a whole host of challenges coming up all the time”, explains Helen Town, assistant director for asset management and development at NPH. “Of course, the pandemic is an additional layer but we’re geared up for that.”

“We’re worried about construction risk, further delays, a potential second wave, but we’re trying to manage that through strong relationships and intelligence right down to who’s supplying the gravel”

Unlike many developers, NPH kept its affordable housing sites open throughout lockdown. “We took the view that, actually we’ll deal with that just like we deal with challenges around archaeology and rainy periods and contractor failure,” says Ms Town. “It felt like every day there was a new challenge but the learning was immense. Other developers that stopped work are probably going through some of the stuff we’ve already dealt with.”

Those challenges, she says, ranged from materials delays to explaining why work was ongoing to nearby residents.

NPH is working into its contracts contingencies for a potential second wave of the virus.

Northampton 3

Northampton Partnerships Homes’ Northfield Road development

Funding-wise, the programme is relatively sturdy with a focus on cheap borrowing through the Housing Revenue Account, use of Right to Buy receipts and no cross-subsidy from market sale homes.

Ms Town acknowledges that much remains uncertain but insists the town’s acute affordable housing need must come first: “Are we concerned about construction costs going up? Yes. Are we concerned about rents not coming in? We are. We’re worried about construction risk, further delays, a potential second wave, but we’re trying to manage that through strong relationships and intelligence right down to who’s supplying the gravel.

“It’s been hard and there’s a ton of risk but you can’t be defeatist. We can’t not build because the risk of not building is greater than the risk of building.”

Waltham Forest

Jess McCabe

Waltham Forest 2

The Score is a 750-home development (with 50% affordable housing), which was approved by a virtual planning committee

Like most of London, Waltham Forest in the north-east of the capital already faced a huge housing crisis before coronavirus.

The council has been controlled by Labour for a decade, and has been working on ambitious plans for housing, through its own housebuilding company and in the borough. Its local plan will likely call for 18,000 new homes in the next 15 years. Two years ago, it announced plans to buy up 400 homes in a 40-year joint venture with Mears, with the aim of getting people in temporary accommodation out of B&Bs.

That was the picture going into the current crisis. So how much has changed?

Councillor Simon Miller has been working to try to protect the borough from the economic consequences of lockdown. That has involved a plan for high streets, microbusinesses and pubs.

And – of course – this means housing. “We’re going to need to build our way out of the economic downturn,” Mr Miller says. For Waltham Forest, it is a question of the priority it puts on the economy and housing. “We’ve always had substandard health and transport infrastructure. If we don’t address that, we’re never going to be giving our residents the services that they need and deserve,” Mr Miller adds.

The council sought to keep things moving early on by setting up virtual planning committee meetings, so decisions could continue to be made. The first of these meetings led to the approval of a 750-home development called The Score, which is meant to be 50% affordable housing. So far 2,000 homes have had virtual planning approval.

“We’re confident that the vast majority of our private sites have started back or are in the process of starting back”

The council restarted its own building sites at the end of April, and has kept in contact with private developers about this to try to instil confidence and avoid sites being stranded.

“That is an incredibly important signal to the wider investment community,” Mr Miller says. Its economic recovery plan cites a figure of bringing forward plans to build 700 homes, of which 350 would be affordable (without specifying tenure).

Still, there is no way that the council alone can meet its ambitions for housing.

This means that the council has to have its eye on how to get the private sector building after the pandemic. It has put out a “statement of intent for our investment partners”, setting out what it says is half a billion pounds of investment across the borough’s economy, although there are not many details about its approach to private housebuilding in the document. The council is planning to produce a brochure with opportunities next month.

“We’re in constant discussions with our major developers,” says Mr Miller.

That includes a project with Transport for London as a partner.

Early in the crisis, Waltham Forest had thought it might have to buy up building projects from private developers unable to continue, but Mr Miller says: “We’re confident that the vast majority of our private sites have started back or are in the process of starting back.”

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