Let’s get York building

FROM April 1, council tenants who have a home said to be too big for them will face the so-called bedroom tax. They will lose 14 per cent of their housing benefit if they have one more bedroom than they need and 25 per cent if they have two surplus bedrooms.

At least that’s one thing William Hickton doesn’t need to worry about. If anything, he jokes, he should get a bedroom refund.

Mr Hickton, his wife Tracy and six children live in a three-bedroomed council semi in Acomb.

It is, Mr Hickton says with admirable understatement, “quite a squeeze”. In fact, he says, it is worse than that. “It’s a nightmare!”

It wasn’t so bad when the children were younger. But as they get older, they want more space.

As it is, one son has left home. But there are five more aged between ten and 16 still at home, along with an 18-year-old daughter, Danielle. She has to sleep on a sofa in the sitting room.

Recently laid off from his job as an environmental operative at Drax, Mr Hickton could not afford the rent on a bigger council home, even though his wife also works weekends as a carer. Besides, the family have friends in their street.

But if the loft could be extended into a bedroom for his daughter it would help.

Now, thanks to a £1 million fund set aside by the council to extend overcrowded council homes, there is a chance that could happen.

There are no guarantees. The council is still deciding how it will allocate the money. But the cash will be available from April – and at about £15,000 to £20,000 for a conversion or extension, assistant director for housing Steve Waddington reckons about 50 council homes could be done.

This would not solve York’s housing shortage overnight, nor would it single-handedly kick-start the city's building industry – although the authority will be going out to tender to local builders to do the work.

But it’s a start. Some council properties cannot be extended, according to Coun Tracey Simpson-Laing, the authority’s cabinet member for housing. “But there are plenty of others that can.”

It makes sense to Mr Hickton. “I think lots of people could benefit,” he said.

The home improvement initiative is part of a much wider Get York Building programme that was approved by the authority’s Cabinet this month.

The programme involves several measures in addition to extending existing council homes. These include:

• Building new council homes, with between 50 and 70 planned in the first phase

• Reducing affordable housing targets

• Setting up a mortgage advice scheme.

The council also recently urged landowners and developers to identify sites in York that are ready for development.

Announcing the Get York Building programme in January, council leader James Alexander claimed it would “provide much-needed homes, help the local economy, unblock the housing market, prove a boost to employment (and create) a knock-on impact in the wider prosperity of the city”.

Reaction was mixed. The Helmsley Group accused the authority of “tinkering around the edges”, but at least two developers operating in York have given the council their backing (see panel).

Coun Simpson-Laing says something needs to be done. In recent years, York has built only a fraction of the new homes it needs to keep up with demand. As a result, the cost of buying or renting in York is more than many people can afford.

“There are a lot of people who work in York who cannot afford to live here,” said Dave Merrett, the authority's cabinet member for transport, planning and sustainability.

Whether Get York Building will provide the stimulus needed to get York building, only time will tell. But here is our guide to some of its key proposals, in addition to the £1 million for extending existing council homes:

Building new council homes

The authority is keen to get back to building new council homes. Last year, it completed work on 19 homes in Lilbourne Drive, Clifton – the first council homes built in York for 20 years.

It seemed this might be a false dawn. The homes were built with the help of £1.12 million from the Government's Social Housing Grant. But the authority didn't even bid for any cash from Whitehall's 2011-2015 Affordable Homes Programme, which replaced the grant.

Yet now it says it plans to build between 50-70 new council homes by 2015, at a cost of about £6 million. So where will the money come from?

From a new housing investment fund. In the past, Whitehall decided how much the council should spend on managing and maintaining its council homes, and how much it should collect through rent. If the amount collected in rent was more than was spent on maintenance and management, the surplus (just under £7 million in 2011/12) had to be paid back to central government.

In 2011, however, the government brought in a new system which allowed councils to make a one-off payment to Whitehall to effectively buy themselves out of the system. Last March, City of York council paid Whitehall £122 million. It now has to pay off that debt, but is still better off than it was before, said Steve Waddington, because it keeps all its rental income. “The cost of paying back the borrowing on £122 million is less than we were paying government each year.”

As a result, the authority will be able to create a £20 million housing investment fund over the next four years. “It is this account that will pay for the new council homes,” said Mr Waddington.

As to where the new homes might be built, a number of possible sites have been identified, the council says. One is the Beckfield Lane tip, which was closed last year. That has been designated as housing land for years, said Tracey Simpson-Laing.

Reducing affordable housing targets

In 2005, the council – then under Liberal Democrat control – introduced a 50 per cent affordable homes target. This aimed to ensure that on any new developments in York, at least 50 per cent of the homes should be affordable – ie available to rent or buy at below market rates.

The targets coincided with a sharp fall in the number of new homes being built in the city, from 1,193 in 2004/5 to just 354 in 2011/12.

In 2010, the authority reduced its targets, to 35 per cent affordable for developments of more than 15 homes on green-field sites, and 25 per cent on brown-field developments of the same size.

Under Get York Building, those targets will reduce further, to 20 per cent on brown-field sites and 30 per cent on green-field sites. On schemes of fewer than 15 homes in rural areas, meanwhile, developers will be able to make an “off site financial contribution” instead of building any affordable homes.

Even these reduced targets will be negotiable says Steve Waddington, the authority’s assistant director for housing – as they always have been.

The council bases its targets on an assumption that developers should be able to make a 20 per cent profit margin. If developers can show that they won’t be able to make such a level of profit, those affordable housing requirements can be brought down further – to zero if necessary.

“I would say, come to us, and let us do a viability assessment,” Mr Waddington said.

Creating a mortgage advice scheme

According to Ian Hessay, managing director of Linden Homes North, around 75 per cent of new home sales come through a mortgage advisor.

This puts small developers at a disadvantage – because, unlike bigger developers, they don't have their own mortgage advice services. This makes it more difficult for potential buyers to get the mortgage advice they need.

The city council is looking at ways of helping to provide such a service. “This will be about helping small developers,” said Mr Waddington.

Call for sites

In recent years, the city council estimated that York needs to build about 800 new homes a year – most of them affordable – to keep up with need. The proposed local plan which will be discussed by the council’s cabinet in April is likely to suggest that figure should be even higher.

There is a huge demand in the city for housing, said Tracey Simpson-Laing – and not just because of people moving to the city to take up well-paid jobs. People are living longer and more people than ever are living alone as adults.

All these factors are putting huge pressure on housing stock.

Yet during the recession, the number of new homes being built in York fell rapidly: down from 1,193 in 2004/5 to just 354 in 2011/12.

One of the biggest reasons for the collapse of housebuilding is the lack of suitable land. Many landowners hold on to land in the hopes prices will rise, says Paul Newman, managing director of Barrett Homes Yorkshire East.

That is why the city council recently asked landowners, developers, agents and members of the public to identify land which has the potential for development.

That resulted in almost 300 individual site submissions, according to the council. Some will be more viable than others. But between them, says Dave Merrett, the authority's cabinet member for transport, planning and sustainability, they should see the council well on the way to ensuring enough land is available to deliver an adequate housing supply for the next 15 years.

Finding land is the key

A criticism levelled at the council has been that its affordable housing targets are killing off house-building.

That charge is repeatedly made by those such as architect Matthew Laverack and quantity surveyor and building consultant Paul Cordock.

But two leading developers, Paul Newman, managing director of Barratt Homes Yorkshire East, and Ian Hessay, managing director of Linden Homes North, say affordable housing targets are not the main reason for the slowdown in housebuilding in York.

Almost every single neighbouring local authority, including Selby, Ryedale and Hambleton, has higher targets for affordable housing than York’s 20-30 per cent, Mr Hessay said.

“Nobody can accuse York of being unreasonable. I would find it extremely difficult to come here and argue that being asked to build 20-30 per cent affordable homes is not viable.”

Both Mr Hessay and Mr Newman agree it is lack of available land that is the real problem.

“A large percentage of land is owned by people who are already wealthy in their own right,” Mr Hessay said. “If they don’t feel they are getting the right amount of money for it, they won’t sell it.”

The council’s search for sites is an attempt to address this problem of land availability.