Everyone needs a home that they can afford and allows them to be socially, economically and geographically mobile.

This is not currently the case – our housing system is dysfunctional. It responds poorly to demand, it is often inflexible in the products and choices it offers people, and it can discourage mobility, so that our labour market is not as flexible as it needs to be.

For example, if current trends continue, only the very wealthiest in society will be able to buy their own home. 84 per cent of first-time buyers under the age of 30 have some financial assistance from their parents, in order to raise an average deposit of £34,000. The average age of first-time buyers who cannot get help from their parents to raise a deposit is now 37 years old, up from 33 years in 2007.

Meanwhile, the way state-subsidised housing is provided can help to reinforce deprivation, failing the very people it was designed to help. It has resulted in concentrations of poor quality housing, often in mono-tenure developments, and has left behind a legacy of significant economic and social problems.

It’s clear that we need to move to a new era, where the aim of Government policy is to enable access to housing that attempts to meet people’s aspirations.

The Government has an opportunity to radically reform the housing market, providing people with choices and opportunities to drive forward the agenda of achieving mixed and sustainable communities.

Places for People has a number of innovative ideas that provide solutions to meeting future housing demand and open up ways for people to access housing, particularly in light of the current financial challenges.

We are one of the largest property management, development and regeneration companies in the UK.

Our focus is on large-scale place making and place management. All of our strategic sites include a mix of homes and tenures, uses and facilities, which we believe are the cornerstone of successful places.

Our mission is to ensure the places we create and manage are successful. Our approach goes much further than

simply building homes. We look at what an area needs to be able to thrive – whether it’s new schools, shops, leisure facilities, childcare, job opportunities, access to learning and training or specialist support services. We also continue to manage these places so they remain sustainable in the future.

Put simply we make a long-term commitment to the communities in which we work, maximising the economic, social and environmental benefits of our investment in those neighbourhoods.

We have developed a wide range of products and services, which are both socially and commercially driven. We are a not-for-dividend organisation and any profit we make is re-invested back into the business and back into the communities where we work.

In this document we set out some of our solutions to the Big Housing Challenge facing the UK, and some of our current work where we are implementing this approach.

David CowansGroup Chief Executive

INTRODUCTION

Production: The demand for housing is projected to remain strong. For instance, the Town and Country Planning Association have estimated the number of households is set to increase by 235,000 per annum to 2033.

What is clear that if we are to meet future housing demand, we need to be building more homes.

However, housebuilding is at its lowest level since 1923; last year saw just 103,000 homes being built in England, while household formation projections show we should be building 232,000 homes per year.

Furthermore planning permissions are continuing to decline; first-time buyers are struggling to access the market; and five million people are registered on social housing waiting lists with little real hope of being allocated a home in the short to medium term.

Affordability: The chronic undersupply of housing has had many adverse social and economic consequences, and resulted in housing being unaffordable for many people.

As a result, the size of the housing market that cannot afford to buy outright is likely to increase substantially from its current level of 6.8 million households. Places for People believes that this will lead to an increase in demand for a greater range of flexible tenure products and a fundamental shift in attitudes to market renting, more in line with many of our European neighbours.

The housing sector has failed to keep pace with changes in society and the economy and we need more radical approaches and innovative delivery models to meet these challenges.

Economy: House building inputs significantly to the UK economy and is one of the country’s leading employers. According to Government figures housing supply accounts for around 3% of UK GDP and provides between 1 and 1.25 million jobs in the UK.

Each home built creates 1.5 direct full-time jobs and many more in the supply chain. Numerous studies have also highlighted that there is an overall economic benefit of £3 additional GDP to every £1 spent on new housebuilding.

Over the past 12 months the economic landscape has continued to challenge all of us. The housing market remains hampered by a tight mortgage market as well as house prices that stand at around nine times the average income.

Even though house prices have remained reasonably static first-time buyers are still finding it difficult to get a mortgage. Tight lending restrictions are preventing many would-be homeowners from getting onto the property ladder.

There were 200,000 first-time buyers last year compared to 600,000 a decade ago, and current trends show that 75 per cent of 25-34-year-olds can’t afford to buy a home.

This means that more people are moving into market rented homes where rent levels are increasing as demand rises and there is a greater pressure on affordable housing.

We believe these trends are set to continue. Minimal growth in real disposable income levels combined with even modest continued growth in house prices means that demand for affordable housing will continue to rise. Therefore the housing sector needs to create more imaginative access routes for a greater range of households than ever before.

Yet planning is acting as a serious brake on economic growth, slowing the delivery of much needed jobs and new businesses not least through the inability to build more new houses.

We support a less bureaucratic planning system that focuses on economic growth but that is designed to ensure that the right homes are provided in the right place.

Financial: Historically, the housing sector builds new affordable homes using a mixture of their own funds, and government investment (grant) to maximise the number of homes built. In the past three years the Government has invested more than £9 billion in new affordable homes, while the housing sector has invested up to £12 billion, most of which has been borrowed from banks and investors.

However, grant funding for new affordable housing development was insufficient before and will be lower in the coming years as the Coalition Government implements plans to bring about a degree of fiscal stability to their budgets and keep government borrowing at a sustainable level.

THE HOUSINGCHALLENGE

HOUSING THE NATIONOUR SOLUTIONS

Places for People believe that we have a once in a generation opportunity to radically change the way the housing system functions in order to meet the massive challenges outlined in this booklet.

Our objective is to increase housing supply and offer options for people to access housing in a way that meets their circumstances. As one of the UK’s largest property management and development companies, we have argued for the wholesale reform of the way housing is conceived and delivered for a long time; working to meet people’s aspirations and not just their minimum needs.

We believe a number of policy solutions need to be put in place.

We have developed a solution that delivers 5,228 new affordable mixed tenure homes over a ten-year period at minimal cost to the public purse and without social housing grant.

By reclassifying historic social housing grant as equity we believe we can lever in significant sums of private investment to deliver these new homes. We know there is demand from institutional investors, and believe that the delivery of these new homes at nil grant can help meet future housing demand, while sustaining 7,500 jobs in the construction sector.

In addition for every £1 spent in delivery of housing investment, £3 is spent in the local economy, meaning our proposal has the ability to generate investment of over £1.5bn in local and regional economies.

Neither housing associations alone, nor housing associations and government, can deliver the level of financing necessary to create the volume of subsidised affordable housing which is necessary to meet genuine housing requirements. We need the input of private institutional funds to support effective delivery of important social and economic policy objectives.

Delivering new build housing in mixed communities Funding can be used more smartly and efficiently. We need to be more radical and put in place new investment models – ones that move away from grant funding to equity-based investment.

This is vital in order to kick-start and sustain housing production, increase capacity and inject liquidity into the market to meet housing demand and provide essential related infrastructure works.

We are not alone in believing this and it is important we now move forward to find and develop new models for the funding and development of affordable housing in the UK.

Past housing delivery models are unsustainable and there needs to be significant financial reform to incentivise companies to focus on investing in housing and community-wide infrastructure on a long-term basis – we see affordable rent tenancies as the an opportunity to start this. However because of the scale of the challenge we believe we needto act now to begin to test new models.

Delivering new flexible housing products to a broader range of people: For many years the housing market has offered limited real choice – either social rent or buying a home, with limited access to shared ownership as a stepping stone between the two. For the majority of people now entering the housing market, these tenures alone do not work for them and we have to make new homes more easily accessible.

We believe that taking a long-term approach to the creation of mixed-tenure communities and creating opportunities for home ownership as well as high-quality market rented stock is the right way forward.

The solution lies in increasing the overall housing supply so that a range of different tenures including outright sale, intermediate, and social housing can be built. Simply funding the building of social housing will not solve the problem – in fact it will likely lead to the creation of mono-tenure estates with consequent economic and social problems.

At Places for People we are putting the focus on the individual and pioneering a flexible tenure approach to help make property ownership accessible. We believe there should be clear housing pathways, with a continuum of products and price points which people can move along, as their circumstances change.

As such, we have a number of different ways people can access the market based on their individual personal financial circumstances and not on their building tenure, including our own mortgage range, equity loans and buy-as-you-go schemes. However, we make the process as straightforward as possible for each customer, with our staff trained to work with them to identify the best option for them to access the home that they want and help them at every stage of the process.

We use a neighbourhood planning approach to tackle the issues and barriers that some of our communities face in becoming prosperous, sustainable and desirable places to live. The plans use an evidence based approach with customer and stakeholder feedback to identify the key issues within a neighbourhood. We now have active plans in 29 communities, covering over 10,000 properties.

Working with Sheffield Hallam University, we have measured and evaluated the effects of our neighbourhood investment activities and have found that 85 per cent of customers living in these areas think their neighbourhood has improved.

We are building on this approach and believe there is a real need for housing providers to work to a framework to develop area-wide business plans that actively seek to break up spatial concentrations of deprivation and provide a broader range of tenures and tenancy types.

Delivering Decent NeighbourhoodsPlaces for People has considerable experience and expertise in developing and delivering sustainable communities.

We are active in over 220 neighbourhoods, and work with 150,000 customers and other agencies to deliver positive and lasting change in communities across the UK.

We need to move to a new era, where places are planned, built, managed and invested in the long term, but with local communities having a genuine say in their local area.

Recent research has highlighted how housing deprivation has been linked to and shown to be a major driver for poor health, increased crime, low education attainment, and increased anti-social behaviour.

We need to tackle all of these things if we are to be able to prosper in an even more competitive world economy.

We have developed a Decent Neighbourhoods Standard which will help the housing sector and other organisations deliver on the Big Society agenda to create safe, inclusive, well-planned communities that meet the aspirations of existing and future residents. In short, it would put residents in the driving seat of stronger and more sustainable communities with better quality housing and local services.

The aim of our Decent Neighbourhoods Standard is to strip out waste and duplication and give clear responsibility and empowerment to local residents and organisations working in their communities. Together they would draw up an action plan to deliver lasting change in areas such as housing, environment, infrastructure, employment, health, crime and education.

OUR DEvELOpmENT AwARDS

wOLvERTON pARk, mILTON kEyNESA DEvELOpmENT Of 300 NEw HOmES

Wolverton Park, Milton Keynes

What House? Award Best Brownfield Development

Evening Standard New Homes Award Best Large Development

Affordable Home Ownership Award Best Large Development

St Thomas’ School, London

What House? AwardBest Partnership Project

Homes and Communities AwardBest Innovation and New Venture

Brooklands, Milton KeynesChartered Institution of Highways and Transportation Environmental Award

Green Spaces for People PortfolioA Green Apple Award from the Green Organisation(Gold)

In recognition of our environmental workISO 14001 certification

National Railway Heritage Award The Triangle Building, Wolverton Park

Urban Land Institute Award (Europe, Middle East and Africa Award)Award for Excellence

We are excited about tackling the challenges facing the housing industry. We believe that this is an opportunity to deliver long-lasting change and reform to the sector, in order to widen housing access, and meet future housing demand.

If you would like to discuss any of the issues raised in this document please contact David Cowans, Group Chief Executive on 01904 650150.

Places for People305 Gray’s Inn RoadLondonWC1X 8QR

Telephone: 0207 843 3800

www.placesforpeople.co.uk

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