Report of the Head of Housing Services

ITEM NO.

REPORT OF THE HEAD OF HOUSING SERVICES

To the Lead Member for Housing Services On: To the Salford Housing Partnership On

TITLE: Consultation on Regional Housing Strategy

RECOMMENDATIONS:

That Lead Member and Salford Housing Partnership endorse the proposed response to the consultation paper on Regional Housing Strategy.

That the response is shared for information purposes with Lead Member for Planning, Community and Social Care and Environmental Services, with the Strategic Directors Team, and the Local Strategic Partnership.

EXECUTIVE SUMMARY:

The Communities Plan has altered the whole basis of the housing system nationally and in the regions. Regional Housing Boards are now tasked with advising Ministers on regional priorities, directing housing investment funding, and bringing together housing, economic and spatial strategies. The implications are potentially far-reaching, enabling regions to give Ministers a clear view about where investment needs to be directed for maximum impact, and placing obligations on regional bodies to get their own collective heads together more effectively.

This report sets out some of the key issues and questions facing the North West, based on a consultation document prepared by the Regional Housing Board and developed so as to create the second Regional Housing Strategy for the North West. It sets out the Board's initial views about regional priorities, and recommends a response from the Salford Housing Partnership and the City Council. BACKGROUND DOCUMENTS:

Regional Housing Strategy Consultation Consultation Paper on Regional Housing Allocations

ASSESSMENT OF RISK:

High – failure to engage in this consultation could result in the City Council losing priority in the allocation of resources

THE SOURCE OF FUNDING IS:

Single Housing Pot Approved Development Programme

LEGAL ADVICE OBTAINED:

None applicable at this stage

FINANCIAL ADVICE OBTAINED:

John Spink/Nigel Dickens

CONTACT OFFICER:

Bob Osborne – 922 8700

WARD(S) TO WHICH REPORT RELATES:

All

KEY COUNCIL POLICIES:

Housing/Regeneration

DETAILS:

1. Introduction

1.1. The Regional Housing Board has published a consultation paper on the development of the Regional Housing Strategy. This gives the Salford Housing Partnership and the City Council the opportunity to comment on and shape regional housing priorities and through this maximise funding opportunities for Salford. 1.2. This report details the proposed content and priorities of the Strategy and suggests a response. Officers and Lead Member will also be developing a wider response at AGMA, M62, HMRF Pathfinder level and through the Regional Housing Forum. It is recommended that this work is also considered by the Regeneration Initiatives Cabinet Steering Group, and through the Salford Housing Partnership. It is also recommended that our response is shared with the LGA for information purposes. 1.3. The detailed thinking leading to the priorities is included at Annex 1 to this report. The report itself concentrates on the main themes of the proposed strategy and the key issues and questions arising from them. The detailed explanation behind each question is in the Annex. 1.4. Commentary and recommended responses are interpolated in bold throughout the report. 1.5. The underlying thematic questions of the consultation are:  Vision  Housing Markets in the NW  Spatial Priotities  Strategic Priorities  Action and Investment Plan

2.0 Proposed responses to the questions in the consultation paper

2.1 Vision

Questions :

1. What do you think the purpose of the Strategy should be ?

The purpose of the Strategy should be to provide an overarching framework to guide decisions on housing investment priorities at regional, sub-regional and borough level. It should also collate and demonstrate the key challenges for the North West and seek to promote the region as a place of housing choice. It should demonstrate the implications of the failure to invest in the North West Housing Markets and the knock on effect that will have on Regional Spatial and Economic Strategies

2. Who should it be aimed at ?

The strategy should be primarily user focused and seek to influence primarily the people of the North West, its elected representatives, and our partners in the Housing and Construction Industry. However this document can also be a powerful tool to advise and influence the government on the importance of housing in the renaissance and economic growth of the North West.

3. How have you used the current Strategy ?

The current strategy has been used as framework to assist in the production of Salfords’ fit for purpose housing strategy

4. Do you have any case studies that demonstrate how the Strategy has influenced your thinking and delivery of priorities ?

Much of our investment strategy has been predicated on the key themes of the previous strategy. For example Housing Market Renewal and the delivery of Decent Homes have been key themes in our approach. The Seedley and Langworthy Project is a key example of how a variety of strategic priorities and funding streams have been merged to meet the challenge of collapsing housing markets. Resources from Housing Market Renewal, European Funds, Approved Development Programme, Single Regeneration Budget, the Development Agency, English Partnerships, and the Private Sector have all been combined to meet the complex web of housing schemes needed to revitalise the area. Outcomes from these investments will allow us to meet Decent Homes targets and realise the challenges in our Supporting People and Homelessness Strategy. A key example is the Alpha Street Project where we have demolished redundant stock to replace it with modern specialist accommodation for the elderly in partnership with Salford First and the community group SALI.

5. Does the vision from the 2003 Regional Housing Strategy still provide a statement of where the region needs to be going?

It may be appropriate to consider inserting commentary about Regional Competitiveness into the vision so as to ensure that the North West is properly positioned both in the context of the Northern Way and the allocation of national resources. Recent central government consultation on the methodology for allocating resources demonstrates a serious shortfall in allocations in comparison with other regions. In context the scheme update for HMR will require a consideration of the economic drivers that will make investment in market renewal sustainable – it would seem logical and consistent if the RHB were to argue the pre-eminence of economic factors in making Housing Investment worthwhile and also sustainable.

2.2 Housing Markets in the North West

Questions :

6. Does the picture painted by the CURS report match with your perceptions of the housing markets you are familiar with in the North West?

In general terms the key factors in the CURS report are consistent with our broad understanding of the market. However more recent work (see below) both refines and expands upon that work.

7. Can you share with the Board information or evidence that supplements or conflicts with the evidence from CURS, and which might lead them to alter their view of particular parts of the housing market?

The Manchester Salford Pathfinder has commissioned a significant body of Research, Foresight and Intellingence work from the ECOTEC consortium. The Salford City Council fit for purpose housing strategy contains a considerable amount of work around “Understanding the Changes” in our Housing Markets. Both of these pieces of work will significantly influence the evidence base that the board can use to derive the emerging strategy.

8. What are your views on the issues noted ? Can you help the Board by providing evidence on the situation in parts (or all) of the region?

All of the key issues listed are considered as part of the documents indicated in our answer to q7.

9. Are there other issues you feel the Board needs to consider here?

We would stress the importance of concentrating on perverse policy incentives that can alter the dynamics of the housing market in the region. Specifically we would highlight the need to establish contingency plans for the effect of Buy to Let, the Homelessness Legislation, Asylum & Refugee resettlement and the Right to Buy. We appreciate that changing policy in many of these areas may be difficult but we feel it is important that the strategy demonstrates the consequences of these policy strands on the overall balance and dynamic of the market. Of clear importance is the need for investment to be tenure blind given the rapid changes in the balance of markets currently being experienced.

2.3 Spatial Priorities Questions:

10. Do you agree that the Board need to set explicit geographical priorities? Do these still need to sit alongside thematic priorities?

It is important that the Board deals with “worst first” and in a climate of a low resource base for the region does not spread the jam to thinly. We would argue that investment in the City Regions in the area is a vital strategic aim so as to maintain regional economic competitiveness.

11. What are your views on the sub-regional classification suggested, both on the principles applied and in relation to your own local area? Does it go far enough? Have you a better approach?

There is a serious danger that stratifying investment allocations along these lines which lead to ineffective actions. For example the Affordability problem is not constrained to “High Demand” areas. There are perverse incentives within current national legislation and policy which are exacerbating this. The combined affect of the over-heated Housing Market, insufficient incentives and controls within the Development Control/Planning process, Audit Commission driven goals to reduce empty homes in the social rented sector, the Right to Buy and the Homelessness Legislation has lead to significant changes in the flow of need and has completely exhausted the supply chain for affordable homes. What were low demand areas eighteen months ago might now be better characterised as “wrong supply” areas. Similarly high demand areas now have wrong supply created by the increase in house prices beyond the means of social renters and first time buyers. It perhaps should not be characterised as a series of hot –spots but an epidemic of wrong supply in all areas which is being spread by a series of conflicting policy strands. The problem with this thesis is that there are probably more hot-spots than resources. This is exacerbated by lack of recognition paid to Housing Supply factors in the determination of Planning Applications in Development Control processes. The new Planning Legislation will assist this but sufficient attention needs to be paid to how the Development Industry is understanding and affecting the supply. It may be more necessary to focus attention on what is being built rather than how it is funded. It is also vitally important to examine how what is being built is then being realised as investment assets through the Buy to Let market rather than as pure housing. There is a serious danger that property investment priorities are controlling the supply side rather than the need to meet housing need. Central Salfords’ overarching vision will be to create a mixed community of tenure. This will not be best served by producing housing that ends up as an investment commodity rather than meeting needs. Greater intra-regional activity is required to protect the environment and the green belt. If areas of current collapse can be transformed to meet the latent demand elsewhere in the region/sub-region – given that resources are limited – then the logical conclusion is that the burden of high demand could be met through the transformational agenda through encouraging migration within and into the region. The “regional” strategy ought to be to ensure that the totality of housing produced meets the needs of the extant population but also allows for planned economic growth. It would be counter-productive to direct resources to widely when there are other adjacent areas which could meet that need with more prudent investment requirements. The clear priority is to ensure that market- driven prices do not distort the supply side so as to exclude those requiring relatively affordable housing. Whether Section 106 powers are sufficient to allow Local Authorities sufficient leverage to influence the supply is perhaps the critical issue. What incentives are their for Building and Construction Industry to adjust their activity to produce the supply to allow a balanced housing market? What fiscal incentives could be given to people acting as “urban pioneers” in resettling currently failing areas?

12. How should the Strategy’s approach relate to existing ‘traditional’ sub- regions, Northern Way city regions, Housing Market Renewal Pathfinder boundaries, travel to work areas…?

The opportunity to go beyond the traditional approach and develop a thesis for the North West as a housing entity should be embraced. The Strategy should make the business case for the North West Housing Market as a whole system.

13. Are some issues sufficiently universal to make a sub-regional approach unnecessary?

There is a clear need to look to the pandemic effect of policy incentives at a regional basis - as noted above all parts of the region are affected in more or less the same way by the unforeseen outcomes of some policy strands. However we should not ignore the effects of sub- regional geography and it is vital that key issues of transport and economic competitiveness are considered at a sub-regional level in their relationship to the formation and long term sustainability of settlements.

2.4 Strategic Priorities

Questions :

14. Are the four priorities, updated and developed over the next few pages, still the right ones for the North West?

There have been significant shifts in the dynamic of the North West Housing Market since the production of the last strategy. It is important to recognize these changes and adjust the priorities accordingly.

15. Should the priorities be weighted to give more of a sense of relative importance ? If so, how could this be done ? The key solution will be in balanced investment decisions that serve those areas where regeneration will yield tangible and sustainable results. We believe that the three City Regions are the key drivers of economic growth in the region. The ECOTEC consortium research clearly demonstrates the paramount need to invest in the development of post-industrial North West. Failure to deal with the very worst areas in terms of social inclusion, low skills and worklessness will perpetuate housing areas of “no hope” and “no escape” and will only result in future failure. The key priority is to ensure that planned investment is sustainable. The significant decline in population in our inner urban cores must be addressed and reversed. Our main settlements will continue to fail unless there is sufficient in-migration to allow them to function optimally. The economic case for balanced population growth is compelling.

16. Did the inclusion of cross-cutting themes have an impact on your thinking, strategy development and action? Should the new Strategy address these issues in a different way?

The themes came across as a “mixed-bag” of priorities which did not particularly interrelate. It may be better to ensure that certain key principles are embedded as objectives in any priority/policy strand rather than to treat them as themes. For example social cohesion is a key aim to be embedded in any policy objective and the board should ensure that any investment planning has at its heart consideration of that factor i.e. “are we best serving our goal of maintaining social cohesion in the region through this policy?” Another example would be Diversity Strategies – any policy option should have at its heart the promotion of effective action to mainstream equality.

2.1.1 Urban renaissance and dealing with changing demand

The suggested regional priorities are to:

Priority 1.1

Maximise the positive impact of the four Housing Market Renewal Pathfinders in their local housing markets, ensuring their integration with sub-regional and regional strategies.

Priority 1.2

Invest strategically in the prevention of market failure in other areas at risk from low demand, applying and adapting lessons from the Pathfinders and elsewhere for use in other areas suffering from low demand. These activities should form part of comprehensive neighbourhood renewal strategies, specifically in:the North West’s Coastal towns, West Cumbria and Furness; other Neighbourhood Renewal Fund areas; the remainder of the North West Metropolitan Area.1

Questions :

17. Are these more detailed priorities right? Will they deliver effective action on the issues discussed under this Strategic Priority?

The proposals to concentrate impact on the Renewal Pathfinders is logical in principle but ignores the factors associated with those areas outside of HMRF boundaries that have characteristics similar to them. The most obvious example in Salford is the Eccles Area which has specific Regeneration Needs but is denied access to HMRF resources. Priority 1.2 would appear to deal with this problem. However the recent consultation paper on Regional Housing Allocations implied that those regions with specific resources such as HMRF would be deemed as already having sufficient resources allocations.. There is a danger that there are insufficient resources to meet all the needs of the North-West. In agreeing to support Priority 1 – and seeking to look for economic competitiveness we need to provide strong evidence (for example through the Manchester/Salford RFI work) to support the need for investment. It should be incumbent on those authorities receiving resources to develop Housing Regeneration Business Plans and Stock Options strategies which maximise access to Private Sector resources. With targeting should come a requirement to maximise the resources levered in by the money made available. Clarity is also required on the roles of English Partnerships, Housing Corporation and the RDA and their own rules for the distribution and allocation of resources. If RHB is to maximise its effectiveness then partner funding agencies need to act within the same overall strategic framework. Initial RFI findings would tend to imply that regional economic competitiveness can be enhanced by targeting investment at the urban cores. The implication of targeting, as with the Pathfinder movement, is that those authorities receiving resources would share best practice with others. If sufficient RFI work is carried to imply that other parts of the region should be included then the clear need is to seek additional resources from Central Government for the region rather than to spread the jam more thinly.

18. Do you think the Regional Housing Strategy should set specific targets for housing clearance? How might those be arrived at?

No – not in isolation from an analysis of all of the other housing flows needed to create a viable housing market.. The business of Housing Market Renewal is not purely about predicting the amount of stock we need to demolish. It is about comprehensively planning the sequencing the re-provision of homes to create a viable market. The RHS needs to look at the whole housing system and determine if it has the correct balance of supply to meet the extant and planned demand for housing. .

1 As defined in Regional Planning Guidance for the North West The North West Business Plan should be derived bottom up from each individual boroughs Housing Strategy and Stock Options Reviews.

19. Is this where the need for high quality housing to attract the ‘knowledge workers’ identified in the Northern Way Growth Strategy should be addressed?

This question perpetuates the fundamental flaw in previous thinking. Markets must be balanced and cohesive. Designing a market to attract a certain customer will only lead to concentrations of one demography. Existing residents wil be quite rightly annoyed that investment is being focused on in-migrants. All housing should be high quality and accessible to all.

2.1.2 Providing affordable homes to maintain balanced communities

The suggested regional priority is to:

Priority 2.1

Tackle the shortages of affordable housing in areas of the North West where demand for additional housing is high, where this impacts adversely on social inclusion and the sustainable growth of local, sub- regional and regional economies.

Questions :

20. Is this priority (unchanged from the current Strategy) right, given the changes in the picture in the last two years? Will it deliver effective action on the issues discussed under this Strategic Priority?

The market dynamics have changed considerably in the last two years – the emphasis of the priority needs to change to reflect this. The key issue is how do we address the shortage of supply when (a) the Planning Development Control Process is eating into the RSS targets through its inability to prevent the development industry from building inappropriate supply (b) Supporting People funding is constraining the development process (c) The Right to Buy is asset stripping affordable homes from the Social Rented Sector (d) House Prices are still beyond the means of most incomes?

There is a serious danger that what ever investment plans are put in place that these drivers will seriously undermine any plans that we make. We need to fnd a way of taking the affordability issues away from the bricks and mortar and aligning it with housing costs. Concentrating resources on developing loan and benefit products that promote affordable homes rather than subsidizing the costs of construction would be more practical. People move, houses do not. Affordability packages should be tied in with people not property.

21. How should the new Strategy deal with rural issues?

Looking at the Housing Market in the North West as a whole system would tend to imply the need not to isolate this work area. For example those people in rural areas who cannot access accommodation will in all likelihood relocate to urban areas. There is therefore a direct correlation between strategies for rural areas and their affect upon Urban planning. The economic sustainability of rural areas is vital to ensure sufficient supplies of produce which is used by our urban areas, and to maintain a vibrant Tourism industry. It would appear logical therefore, from a whole system perspective, to ensure mutuality of purpose between urban and rural areas. Again, providing fiscal incentives for “rural pioneers” and key workers rather than bricks and mortar would assist population retention and growth. If there is a sufficient supply of housing in rural areas it would be insidious to increase that supply when all that needs to be down is to make it more accessible to low income families by investing in underwriting/discounting the market costs.

22. Would affordability targets below regional level be helpful? How should they be set and monitored?

Again this is a blunk stick. Local areas need to be looked at as their own whole systems and the proper balance between supply and demand needs to be made. Targets produce perverse incentives. It would be better to calculate the optimal settlement type for each area and determine the balance of tenure and costs to make that work effectively. From that base local areas could best plan over a fixed time frame the appropriate balance for their area and then set objectives to achieve that. More important for the strategy is to facilitate the process of meeting those objectives by addressing constraints to growth.

2.1.3. Delivering decent homes in thriving neighbourhoods

The suggested regional priority is to:

Priority 3.1 Improve the condition of housing stock with a sustainable future as part of broadly based regeneration strategies, particularly in areas of concentrated unfitness and disrepair.

Questions: 23. Is this priority (unchanged from the current Strategy) still appropriate? Will it deliver effective action on the issues discussed under this Strategic Priority?

It is vital that a tenure blind whole systems approach to stock condition is embedded in the strategy. Splitting investment decisions along tenure lines – especially when the population is shifting tenure so rapidly – will lead to an inequitable distribution of resources. Local Housing Market assessments should measure the viability of each area and investment planning should be lead by overall regeneration needs and not tied to a specific tenure type. The case for a Housing Business Plan and Stock Options process which crosses all tenures is compelling. For example the Little Hulton Area in Salford was previously a monolithic collection of council estates. A combination of the Right to Buy, on-sales of former council homes to the Private Rented Sector, disposals of small packages of stock to RSLs, and demolition of some sites followed by infill for Home Ownership has resulted in a patchwork quilt of tenure with some 60% of the area no longer being in Council Ownership. Investment in the stock under these circumstances will have to be carefully planned with equal distribution of resources so as to avod a “gap toothed” approach to investment.

24. Is dealing with stock condition still a separate priority for the North West? If not, what does that mean for the other strategic priorities set out in this paper?

Stock Condition, and more importantly the condition of the environment around that stock is still of paramount importance. Lack of investment in private sector stock was one of the factors leading to the obsolescence of older pre 1919 stock and consequent market collapse. There is a strong case for building an economy around the repair and maintenance of the regions housing stock. However stock condition needs to be part of a clear business planning process for sustainable communities where re-provision to replace obsolescent stock, effective maintenance, and the creation of new homes all work together to create a balanced housing supply which maintains the existing population and attracts new economic migrants. Stock Condition needs to be embedded in regeneration. Co-aligning Stock Options processes for council owned stock and Housing Market Renewal for example is vital.

2.1.4. Meeting the region’s needs for specialist and supported housing

The suggested regional priority is to:

Priority 4.1 Ensure a range of specialist and supported housing is available, appropriate to local needs and strategies, and integrated with relevant support and care services. Questions:

25. Is this priority (unchanged from the current Strategy) still appropriate? Will it deliver effective action on the issues discussed under this Strategic Priority?

The role of the RHS should be to correlate the strategies from each individual authority to understand the totality of need and to map investment requirements. It should promote and support sub-regional provision so as to maximise opportunities within the available resource limits. It should mainstream investment in this area to ensure that it is being dealt with as part of the whole system and not isolated. It should maximise the investment of Primary Care Trusts and other Health Bodies to ensure that there is synergy between Health Policy and Investment.

It should ensure flexibility in supply by requiring/outlining minimum standards of provision. It should direct the balance between revenue and capital resources.It should facilitate mixing of funding streams so as to allow the maximum impact.

A whole Housing System, including a tenure blind, customer first perspective should not allow an investment strategy that encourages separation along these lines. Synergy between individual customer needs and the overall well being of communities is vital if communities are to be sustainable. Any regeneration planning that does not look to the health and well being of its citizens is inherently flawed. The system is not steady state. Regeneration, Economic Change and other drivers will constantly alter the balance of needs and supply. Any strategy must be alive to these dynamics and create an investment model which is able to react to them. For example the provision of housing products that facilitate easy relocation of customers with supported housing needs from regeneration areas is vital. These products might also be tailored to assist housing needs in other situations.

26. Should the Board commit to develop, with stakeholders in the region, a North West Supported Housing Strategy as a ‘daughter document’ to the Regional Housing Strategy?

Yes. Salford is planning to prepare its own Supported Housing Strategy to sit below its overall Housing Strategy but also to run parallel to its Supporting People Strategy. We fully support this proposal

2.1.5.Action and investment plan

Another area the Board are keen to develop in the new Strategy is a clearer link between the priorities set out and action to deliver those priorities. The realities of the scale and complexity of the region and the issues the Board deal with means that this will need to remain at a relatively high level, but it is important to give a clear indication of the respective actions and lead responsibility for the Board and partners.

This might include:

 Flagging up opportunities for investment, particularly from the private sector, but also from public and voluntary sources

 ‘Aligning regional strategies’ – what the Board and its member agencies are doing to make this into a reality in the North West, and what this means in practice for the way things are done in the future

 Some practical lessons from work the Board has commissioned on learning from past and current regeneration and other programmes

 Indications of the broad direction of Regional Housing Pot allocations, leaving the detail for a separate allocation strategy document

 Strategic development activities continuing under the auspices of the Board, including lessons from the Commissioning projects on private sector renewal and affordability issues

 The Board’s priorities in seeking to influence national and cross- regional policy development

Questions:

27. What else do you think might be included in an action plan?

The plan should be to the same format required for individual Fit for Purpose Housing Strategies – there would then be a clear golden thread between local housing needs and the North West Regional Housing Strategy.

28.Does all of this belong in a strategy document, or does an action plan need to be separate and more regularly updated?

Again the same rules that apply to local FFP housing strategies should apply to the RHS. A separate but linked action plan which can be scrutinized regularly is of paramount importance

3.0 Conclusions and Recommendations

3.1 The report has provided responses to the key questions raised in the consultation paper on the Regional Housing Strategy. 3.2 A key message from the SHP and the City Council is that the RHS needs to be updated to reflect the significant changes in Housing Markets in the region.

3.3 The Understanding Change and RFI work will be vital evidence in directing the RHS.

3.4 SHP and Members are asked to endorse the proposed responses.

Bob Osborne Head of Housing February 2005 Annex 1

North West Regional Housing Strategy 2005 A consultation paper

North West Regional Housing Board January 2005 www.nwrhb.org.uk Contents Page

Introduction 3

How you can contribute 7

Vision 8

Changing policy context 9

Housing markets in the North West 10

The Board’s priorities 13

Spatial priorities 13

Strategic priorities 18

1 - Urban renaissance and dealing with changing demand 19

2 - Providing affordable homes to maintain balanced communities 22

3 - Delivering decent homes in thriving neighbourhoods 23

4 - Meeting the region’s needs for specialist and supported housing 27

Action and investment plan 29

Allocating the Regional Housing Pot 30

Annexes

A. Summary of questions for consultees 31

B. References 34

C. The housing market in the North West 35 North West Regional Housing Strategy 2005 A consultation paper

Introduction

1 As a key regional element of the Sustainable Communities Plan, the North West put together its first Regional Housing Strategy (RHS) in July 2003. Although completed in a tight timeframe, this Strategy built on earlier work and has been widely welcomed, subsequently providing the overarching strategic direction for the delivery of integrated intervention programmes in North West housing markets.

2 The North West Regional Housing Board need to submit the final version of the second Regional Housing Strategy (RHS) to Ministers in May 2005. This consultation document is a vital part of the preparation of the revised Strategy for the North West. It provides the opportunity for stakeholders to stand back and consider how the RHS can be taken forward, how it can best respond to changing housing markets and to the opportunities provided by the strengthening of the regions role in investment decision making.

3 This paper is not a draft Strategy - it is intended to indicate the Board’s view on the direction the new RHS is likely to take, and to inspire a wider dialogue in the region on the main issues this raises. The response to this document will be a crucial part of the development of the Strategy, and the consultation period between now and March 2005 represents the best opportunity for partners in the region to influence the Board’s strategic thinking.

4 The Board have clear ambitions for the new Regional Housing Strategy. Taking the first RHS forward, it must:

 Set out a comprehensive view of the strategic housing issues facing the North West

 Establish foundations for the forthcoming Regional Spatial and Regional Economic Strategies to build upon, and respond to the Northern Way Growth Strategy

 Develop and make more explicit spatial and thematic priorities for the region to better direct investment decision making.

 Be grounded in a sound understanding of the housing markets in the North West and their relationship with both economic drivers and social and environmental sustainability  Set long-term objectives for the region against which shorter term priorities for action can be established

 Identify where the Board and its partners can make a demonstrable positive difference.

5 In essence, the Board wish to see that the new Strategy is more explicitly focused on the economic impacts and benefits of the housing sector, pays greater attention to the relationships between the housing and planning agendas, and has a spatial dimension largely absent from the current Strategy.

6 In seeking to achieve the above, however, the Board recognise that this is an extraordinarily diverse and complex region with many difficult, competing challenges and crucially finite resources. Consequently these strategic aims must be achieved primarily through the use of the existing housing stock and by ensuring the appropriate balance of both public and private investment to the RHS priorities. This is unlikely to be achieved wholly consensually and will require the Board to take difficult decisions in line not just with the RHS but also the Regional Spatial and Economic Strategies. This will require not only strategic leadership but crucially bottom up majority support from delivery partners. This consultation paper provides the opportunity to feed into this debate to ensure that there is appropriate balance between the strategic aims of the RHS and the practical delivery of work to meet the needs of communities in the North West.

7 The Board are also seeking to set out some of the key achievements in the North West since the current Strategy was produced, recognising that a Regional Housing Strategy is itself an important opportunity to promote our successes to Ministers and other decision-makers at national and regional level. To do this throughout the paper the Board are looking for partners to come forward with examples of good practice and successful schemes.

8 At the time of writing, the Government is considering responses to a consultation exercise on the proposed merger of Regional Housing Boards and Regional Planning Bodies (in this region, the North West Regional Assembly). This document and the resulting Regional Housing Strategy will be the work of the current Regional Housing Board, ahead of the merger with the Regional Assembly. The Board is convinced that a merger is the appropriate way forward, given the close links between the housing and spatial planning agendas, and discussions with the Assembly have begun on the new arrangements in the North West.

9 In addition, the Regional Agencies are currently working on a set of common over arching aims and objectives for the three regional strategies. It is expected that the first element of this work will be ready for debate at the Urban Summit in late January 2005 and the emerging principals have been included in this consultation paper. The Board will include these common aims in the new Regional Housing Strategy and will ensure that their priorities will contribute to them as fully as possible. Members of the North West Regional Housing Board As at January 2005

Keith Barnes, Regional Director, Government Office for the North West (Chair) John Carleton, Director, North Field, Housing Corporation Mike Gaskell, Group Managing Director, Morris Homes Steve Machin, Chief Executive, North West Regional Assembly Cllr Tony McDermott, North West Regional Assembly Cllr Noel Spencer, Chair, North West Housing Forum Paul Spooner, Regional Director, NW and West Midlands, English Partnerships Peter Styche, Director, Communities, Government Office for the North West Peter White, Director of Strategy, Northwest Development Agency How you can contribute

10 You will find questions for you to consider and respond to throughout this consultation paper. The Board welcome your views on those questions, on other issues raised by this paper, or on issues not mentioned here you feel are relevant. We would also welcome your ideas for achievements we can highlight in the new Strategy. The questions have been summarised in Annex A for ease of reference. They are intended to help spark off discussion, and not to restrict you in responding, although it would be helpful if you could refer to the question numbers in your response. Please note that you don’t need to give your views on all the questions – just refer to the ones that are most relevant for you or your organisation.

11 Please note that this paper is not intended to be a comprehensive draft Regional Housing Strategy, so it does entirely skip over or give only fleeting mentions to some important issues. In responding, it is helpful to focus on how your arguments should impact on the way we put together the final Regional Housing Strategy, the priorities or objectives the Board might want to set for the region, or the actions which need to be taken either by the Board or partners within the region. Providing evidence to back up your points, or to support or refute the Board’s views, is crucial.

12 The Board intend to publishing written responses to this consultation paper on their website (www.nwrhb.org.uk), and in due course to produce a consultation response document to fit alongside the final Strategy. The Board will assume that any responses received are for publication unless you clearly state otherwise.

Please send responses to : [email protected]

13 If you can send you views electronically, that will help us to share them quickly among the team working on the new Strategy. However, if that’s not possible, please send them to the following address anyway, they will be considered:

David Scale Government Office for the North West City Tower Piccadilly Plaza Manchester M1 4BE

The deadline for all responses is 4 March 2005 Vision

14 The new Strategy will begin with a statement of the Board’s vision for the region. The vision set out in the 2003 Strategy is reproduced below, with a question for consultees to consider.

15 However, before moving on to the detailed content, the Board wanted to seek views on some more general questions about the Strategy and to seek feedback on how it has been used to date :

Questions :

1. What do you think the purpose of the Strategy should be ?

2. Who should it be aimed at ?

3. How have you used the current Strategy ?

4. Do you have any case studies that demonstrate how the Strategy has influenced your thinking and delivery of priorities ?

16 In the 2003 Regional Housing Strategy the Board vision is stated as follows :

“ Our vision is a region working together to ensure that every part of the North West offers everyone

a choice of good quality housing in successful, secure and sustainable communities.

The North West should be a region which:

Involves people and communities in planning their futures

Invests in sustainable neighbourhoods,

Provides a range of high quality properties for sale and rent

Supports the development of mixed communities

Rejuvenates our urban areas so they are the first choice for all kinds of households

Promotes sustainable rural communities And replaces obsolete housing in a planned and balanced way.”

Question :

5. Does this vision, from the 2003 Regional Housing Strategy, still provide a statement of where the region needs to be going?

Changing policy context

17 The new Regional Housing Strategy will need to briefly set out the policy context into which it is being embedded. However, this is not the place to replicate other documents in great detail. Instead, this part of the Strategy will:

 Sketch out the points of greatest relevance to the North West from national policy developments, including the Barker Review, Supporting People issues, and developments in planning policy;

 Consider the relationship between the new Strategy and the Northern Way Growth Strategy;

 Respond to current and emerging regional policies and strategies, including Regional Planning Guidance and Regional Economic Strategy;

 Identify regional implications of strategic sub-regional initiatives such as the four Housing Market Renewal Pathfinders and developing City Region strategies. Housing markets in the North West

18 The Regional Housing Board commissioned the Centre for Urban and Regional Studies (CURS) at the University of Birmingham to build on their earlier work on housing markets in the region. Their full final report is available on the Board’s website (www.nwrhb.org.uk), and includes a summary of the brief for their research. A summary of the main findings is included as Annex C to this document.

Questions :

6. Does the picture painted by the CURS report match with your perceptions of the housing markets you are familiar with in the North West?

19 The new Strategy will report some of the key findings of the CURS work, selected basic data on demographics, house condition and supply trends, and other relevant material available sub-regionally or locally. Among CURS’ conclusions is a warning for the Board and other decision-makers that “the housing market in the North West has entered a phase of change after a period of stability. This has occurred at a point when central government, local authorities and other bodies have embarked on the most substantial programme of market intervention for decades.” We therefore need to be cautious in interpreting signals from the market, but it is perhaps even more important that we try to do so.

20 The Board need to establish and set out in the Strategy as clear a view as is possible on issues including:

 The scale and patterns of demand for housing and their relationship with current housing supply, and with local economic trends and drivers in different parts of the region;

 The extent to which the market will meet demand without further intervention from the Board or other public sector players, and any barriers which might be inhibiting market solutions;  Whether recent rises in property values in previously low value, low demand neighbourhoods represent a fundamental change in demand to live in these properties;

 The extent to which rising housing costs across the region are impacting on the affordability of housing in local markets, and any impacts this has on local or regional economic prospects;

 The relationship between affordability issues and rising homelessness reported in some parts of the North West; and

 The ability of the Board and other public sector agencies to influence the various sources of investment in local housing markets.

Question :

8. What are your views on the issues noted above? Can you help the Board by providing evidence on the situation in parts (or all) of the region?

9. Are there other issues you feel the Board needs to consider here?

21 While these are complex matters, the Board feels that the new Strategy needs to go as far as possible toward addressing them. Some of this can probably only be done at a sub-regional or housing market level, and any regional conclusions built up from there. However, we can suggest here and in the rest of this consultation paper some tentative conclusions reached from available evidence and discussions.

22 We should begin by stating that, in much of the North West, the housing market operates effectively as a means of delivering the right homes in the right mix, quantity, location and at the right cost to meet the needs and aspirations of most local households. In a document such as a Regional Housing Strategy, we inevitably focus on the very real problems parts of the North West faces, but we need to acknowledge that those problems are by no means universal.

23 That said, the Board share CURS’ view that the recent sharp rises in property prices in some neighbourhoods previously at risk from low demand do not, in general, indicate a sudden turn-around in the prospects of those areas again becoming thriving, sustainable communities into the future. It is therefore essential that we continue to pursue an active strategy of dealing with the underlying structural problems facing housing markets in some parts of the North West, including the four Housing Market Renewal Pathfinder areas. 24 This approach needs to be tied into decisions affecting housing markets across the region, if actions to restructure and rejuvenate previously failing areas are not to be undermined by over-supply in nearby areas of stronger demand. However, this must also be balanced by consideration of the tightening affordability situation caused by the general increase in house prices.

25 The links between housing markets and regional and sub-regional economic development strategies need to be emphasised and clarified – if urban renaissance and rural regeneration are to be achieved, housing has a crucial part to play, but it is not always clear that this is understood and acted upon.

26 At the heart of much of this discussion is the need to establish a clear vision for the role or function of different parts of the region looking to the future, and the implications that has for economic trajectories and the patterns of housing needs, aspirations and demand. This is where the ‘over-lapping circles’ of the Regional Housing, Economic and Spatial Strategies intersect, and we must make the most of the opportunity to develop and agree a shared view as the production of the three Strategies is completed. The Board’s priorities

Spatial priorities

27 One of the key ambitions the Board have for the new Regional Housing Strategy is that it should directly address the spatial dimension dealt with only indirectly in the current Strategy’s thematic approach. As a minimum, the Strategy must consider the implications of the Board’s thematic strategic priorities for different parts of the region. The potential is there to go further, and to begin to establish some explicit spatial priorities for regional attention.

28 This should help to clarify and focus the Board’s work more effectively on delivering real changes on the ground, not just through the resources available to the Board, but also by much more directly influencing the broader investment from regional agencies and elsewhere. This approach underlies the ‘City Regions’ proposed in the Northern Way Growth Strategy, and any approach from the Board will need to recognise these and other sub-regional geographies already being used or developed.

29 There are many ways the Board could approach this. One would be to use a matrix approach, to show the key priorities and their impact or importance for the traditional sub-regions (Cumbria, Merseyside, etc.) and use this as a framework for some high level statements about the type of interventions the Board would expect in each area. This could probably be achieved relatively easily in dialogue with sub-regional partnerships already in existence, and might be accompanied by some relevant sub-regional data on key trends and issues.

30 A more sophisticated, and therefore challenging, approach would be to start to map out the housing markets within the region and attempt to use these as building blocks for a new spatial dimension to the Board’s strategic priorities. This would need to be accompanied by applying a set of judgements about the needs and characteristics of each housing market area, which would again benefit from dialogue with local stakeholders. An approach developed in west and central Cumbria2 is one model which might be adapted or extended for use elsewhere down to an individual settlement level.

31 Alternatively, the Board might seek to develop a higher level typology of housing markets across the region, and use these to help inject a spatial dimension to the Strategy. This would allow the Board to recognise the differences in market drivers and circumstances across the region, to develop appropriate policy responses for the Regional Housing Strategy, and also to raise issues which will need to be

2 Housing Markets: Preparing for Change, Jacqueline Blenkinship and Judith Gibbons for Impact Housing Association and the Housing Corporation, 2004 resolved in the Regional Spatial Strategy. An initial attempt to define possible housing market sub-regions is included here (see overleaf), and we would welcome views on the principles used and the outcome in terms of a spatial division of the region. We could add further dimensions to this – for example, the Northern Way documents draw a distinction between:

 “areas of old and obsolete housing (usually close to city and main town centres) which require high growth renewal programmes, and where the economic trajectory is being hampered by the lack of good quality supply, but demand is strong;

 areas of low demand where in the absence of an effective economic driver, and where there is sufficient overall housing supply, the quantity of obsolete or unpopular housing needs to be reduced.”

Questions:

10. Do you agree that the Board need to set explicit geographical priorities? Do these still need to sit alongside thematic priorities?

11. What are your views on the sub-regional classification suggested, both on the principles applied and in relation to your own local area? Does it go far enough? Have you a better approach?

12. How should the Strategy’s approach relate to existing ‘traditional’ sub-regions, Northern Way city regions, Housing Market Renewal Pathfinder boundaries, travel to work areas…?

13. Are some issues sufficiently universal to make a sub-regional approach unnecessary?

NORTH WEST HOUSING MARKETS

Market Typologies (see map on page 15)

T1. Low demand problems across most of area (though varying intensity). Priority for Market Renewal activity – need for transformation of housing offer. Planning policies need to be sympathetic to adverse displacement effects outside areas of market renewal activity. Funding priorities stock renewal, improved tenure mix stock replacement.

Locations : N & E Greater Manchester, East Lancashire, Central Merseyside, West Cumbria and Furness

T2. Balanced market, demand/supply roughly in equilibrium, possible pockets of low demand or affordability. Planning policies should continue to meet demand with appropriate balance of affordable provision. Funding priorities stock decency and urban affordability.

Locations: Bury-Warrington Arc, Central & West Lancs.

T3. High cost/high demand with significant affordability needs. Potential for additions to stock limited by rural/landscape/green belt policies outside urban areas. Funding priority affordability in urban areas.

Locations : North And East Cheshire, South Greater Manchester.

T4. Potential for balanced market hindered through over supply of low value, poor condition or otherwise unsuitable stock (e.g. former hotels/bed-sits and radburn estates). Planning policies should seek to boost economy through stock replacement/renewal. Funding priorities stock decency.

Locations: Coastal towns, Skelmersdale

T5. High value rural areas/market towns. Potential for additional stock limited. Planning policies needed which recognise specific needs of rural communities through e.g. local needs conditions. Funding priority rural affordability.

Locations: North Lancashire, Central & East Cumbria.

Continued.

T6. Discrete market area with significant linkages (economic and social) to adjacent region (N Wales) and strong economic potential. Planning policies should meet demand and support the economic growth of Chester, alongside affordable provision. Funding priorities stock decency and affordability (rural and urban)

Locations: Chester/Deeside.

T7. High value rural areas/market towns vulnerable to commuter pressures. Potential for additional stock limited in order to support urban regeneration but planning policies should reflect rural needs Funding priority rural affordability.

Location : South and Central Cheshire to T7.

T8. Conurbation Cores experiencing recent growth in higher density, high value properties with strong buy to let tendency. Principal economic drives for their respective conurbations and beyond. Planning policies needed to enable spread of growth potential and economic and social benefits into peripheral areas (e.g. Liverpool inner core) in support of low demand pathfinders and social and economic renewal.

Locations: Liverpool and Manchester/Salford centres. Strategic Priorities

32 The first Regional Housing Strategy for the North West set out four strategic priorities for the region:

1. Urban renaissance and dealing with changing demand 2. Providing affordable homes to maintain balanced communities 3. Delivering decent homes in thriving neighbourhoods 4. Meeting the region’s needs for specialist and supported housing

Questions :

14. Are the four priorities, updated and developed over the next few pages, still the right ones for the North West?

15. Should the priorities be weighted to give more of a sense of relative importance ? If so, how could this be done ?

33 These were complemented by three cross-cutting themes relevant to all four strategic priorities:

 Housing and community cohesion  Housing and neighbourhood renewal  Sustainability, quality and design

34 The Board is investigating the impact the themes had on the investment made through the Regional Housing Pot as part of the development of options for allocation processes for 2006/07 and 2007/08. However, this is only one aspect of the Strategy, and the Board is keen to understand whether the cross-cutting themes were considered and acted upon in local or sub-regional discussions and strategies.

Question :

16. Did the inclusion of cross-cutting themes have an impact on your thinking, strategy development and action? Should the new Strategy address these issues in a different way? 35 For each of the strategic priorities, the new Strategy will need to set out a clear statement of the ‘issue’; an analysis of the main drivers and trends; opportunities and barriers to achieving change in the North West; relevant spatial patterns and implications; and specific reference to the cross-cutting themes. It should also identify clearly the linkages to and implications for other regional strategies and programmes, particularly for the Regional Spatial Strategy and Regional Economic Strategy. We have not attempted this now, but the following sections sketch out some of the key issues and questions for the region to consider.

Strategic priority 1:

Urban renaissance and dealing with changing demand

Key issues:

 Understanding and reinforcing the relationship between ‘housing’ regeneration and broader economic, spatial, environmental and social regeneration strategies  Establishing the link between housing and the economic performance of the region, and the potential for housing to act as one of the drivers of economic growth  The importance of the spatial planning system at regional and sub- regional scale in delivering long-lasting change  Achieving an appropriate balance between prevention of market failure and restructuring of failed markets  Distinguishing between short term market fluctuations and medium term changes in aspirations, economic circumstances, household structures and patterns of demand for housing

36 The concept of urban renaissance in the North West is at the heart of the current Regional Housing Strategy, Regional Planning Guidance and the Regional Economic Strategy. This is central to achieving aspirations for economic transformation in the region’s conurbations, coastal resorts and former industrial towns, as well as to plans for a more sustainable and socially inclusive future for many neighbourhoods currently offering a poor quality of life to local communities.

37 The new Strategy will restate and develop the case for intervention in dealing with the housing aspects of this broad and complex issue. The drivers within many of the local housing markets identified in the last Strategy as being at risk from low demand have changed, often bringing increasing property values and pushing costs of intervening higher. However, as the CURS study shows, in general the lower value areas have not caught up with neighbouring higher value areas - indeed the gaps have widened. 38 The Northern Way Growth Strategy makes a clear link between the housing market situation in the North and the prospects for economic growth, citing the recent Barker Review of Housing Supply conclusion that housing market failures in parts of the North deter investment and in-migration. Northern Way argues that:

1. “ Low demand areas consistently show low levels of economic activity, which is a major factor in our poor economic performance;

2. Problems of low demand and poor reputation have a disproportionate negative impact on the image of our towns and cities, contributing to the “Grim up North” stereotype.”

39 With the region’s four Housing Market Renewal Pathfinders now starting their work in earnest on the ground, strategic action to tackle these issues is underway at a much more significant scale than previously. The Pathfinders are still at an early stage in their development, and we need to ensure the linkages between regional agendas and their programmes are in place if we are to both deliver the transformation of the Pathfinder areas without undermining other parts of the region, and secure necessary development and renewal in other areas without adversely impacting on the prospects for the Pathfinders.

40 The desired transformation is only likely to be achieved if we are successful in attracting private sector investment back into Housing Market Renewal and other low demand areas. Only then is there a realistic prospect of breaking the cycle of public sector investment failing to deliver sustained transformation, a cycle we have seen too often over the last thirty years or more in the North West. The Northern Way Growth Strategy also argues that a significant acceleration of clearance and replacement of housing, across different tenures, is a vital component of the overall programme for the North, and one which is likely to require significant public sector investment, beyond that encompassed by the Pathfinders.

41 The suggested regional priorities are to:

Priority 1.1

Maximise the positive impact of the four Housing Market Renewal Pathfinders in their local housing markets, ensuring their integration with sub-regional and regional strategies. Priority 1.2

the North West’s coastal towns, West Cumbria and Furness; other Neighbourhood Renewal Fund areas; and the remainder of the North West Metropolitan Area.3

Questions :

17. Are these more detailed priorities right? Will they deliver effective action on the issues discussed under this Strategic Priority?

18. Do you think the Regional Housing Strategy should set specific targets for housing clearance? How might those be arrived at?

19. Is this where the need for high quality housing to attract the ‘knowledge workers’ identified in the Northern Way Growth Strategy should be addressed?

3 As defined in Regional Planning Guidance for the North West Strategic Priority 2:

Providing affordable homes to maintain balanced communities

Key issues:

 The extent to which the market can and will deliver appropriate affordable housing across the region

 Recent rises in house prices and their impact on affordability and homelessness

 The relationship between strategies to tackle low demand and renewal in low value parts of the conurbations, and reducing pressure on nearby high cost areas

 How the availability of affordable housing affects local, sub-regional and regional economic performance

 Affordable housing provision as a contributor to sustaining viable rural communities and services

 The role of the planning system, at regional and local level, as a tool for delivering affordable housing

42 The current Regional Housing Strategy sketches a picture of a region where affordable housing was, with a number of mainly rural exceptions, in plentiful supply. The CURS research makes clear that this is no longer the case, with house prices rising considerably in the last couple of years. While simple comparisons of income to house prices can gloss over the importance of low interest rates, easier access to higher levels of mortgage credit and increased support from family members to first-time buyers, nonetheless owner-occupation in the North West is now a much less affordable proposition. The rising trend in homelessness across the region, while no doubt more complex in its origins, seems nonetheless to confirm that general conclusion.

43 This raises a number of issues for the development of the new Strategy, not least of which is the need to make judgements as to what extent the higher prices, and therefore demand to provide access to affordable housing, are likely to be sustained. As these increases largely represent the North West market catching up with earlier increases in the rest of the country, it can perhaps be concluded that we should proceed on the assumption that no rapid re-adjustment will occur. 44 Next is the question of which tools the Board and others in the region should be using to address this issue. This includes considering the extent to which traditional investment via Housing Corporation channels and housing associations is able to deliver a range of appropriate solutions, or whether new models can offer different options. This may be informed by the emerging work on the Board’s second round of commissioning projects on affordable housing provision, and changes such as the Corporation’s ability to offer support to private developers may also open up new opportunities.

45 Further, the Northern Way Growth Strategy calls for a restructuring of the Housing Corporation’s role in the North “from being an allocator of grant to being a provider of gap funding…[and seeking] cost effective and socially successful outcomes from complex negotiations”. Issues such as the extent to which existing property can be used to provide affordable housing, how the current stock of affordable housing can be secured for the future, and whether new affordable housing can be maintained as such in perpetuity are all relevant.

46 Part of this will relate to the planning system, which is arguably central to this issue in particular. Housebuilders and others have argued strongly that the current restraint on new additional housing provision in some parts of the region following the publication of Regional Planning Guidance is contributing to housing undersupply, and that this will further fuel pressure on house prices. This argument needs to be played out alongside the case for restraint as a means of encouraging the renewal of lower value urban areas to reduce pressure on nearby high cost areas, and will doubtless be at the heart of debates as the Regional Spatial Strategy is developed.

47 A more sophisticated approach to the application of restraint may well be the outcome, and it may be helpful for the Regional Housing Strategy to help point the way forward. At the same time, there is conflicting evidence from around the North West as to the impact of housing restraint policies regionally on the ability of Section 106 agreements to contribute a continuing supply of new affordable housing, and this may be something that the Strategy can usefully address in advance of the Regional Spatial Strategy.

48 The Northern Way Growth Strategy and the Barker Review both suggest setting of affordability goals or targets, in Barker’s case at national and regional level, in the Northern Way at a more local level depending on market conditions. Government are considering how national and regional targets might be set and progress measured, but it seems likely that this will form part of the approach expected of Regional Housing Boards.

49 The suggested regional priority is to:

Priority 2.1 Tackle the shortages of affordable housing in areas of the North West where demand for additional housing is high, where this impacts adversely on social inclusion and the sustainable growth of local, sub-regional and regional economies.

Questions :

21. How should the new Strategy deal with rural issues?

22. Would affordability targets below regional level be helpful? How should they be set and monitored? Strategic Priority 3:

Delivering decent homes in thriving neighbourhoods

Key issues:

 Continuing progress toward the delivery of the Government’s target that by 2010 all social tenants should have a ‘Decent Home’

 Increasing shift of focus toward achieving Decent Homes for vulnerable households in the private sector

 How far should this be separated from broader regeneration activity as a strategic priority?

50 The condition of the North West’s housing stock has traditionally been poor compared with most other regions in England, with almost 7% of private sector properties still reported as unfit for human habitation at April 2004.

51 The Government’s Decent Homes programmes are helping deliver a transformation in the condition of the North West’s social rented stock. Local authorities still retaining their housing stock have a deadline of July 2005 to complete a rigorous appraisal of the options available to deliver the Decent Homes target, and many have already done so. No additional funding from the Regional Housing Board will be available to local authorities, given the availability of other resources, including gap funding for negative valued stock transfer proposals. The current approach to delivering Decent Homes in the housing association sector is also likely to continue as at present, with the emphasis on the need for associations to put in place appropriate strategies to manage their assets with the 2010 target in mind.

52 The main strategic focus therefore needs to rest on the private sector stock, where the problems are greater in scale and intensity. The Board have, through their first round of Commissioning projects, supported the development and spread of innovation and good practice in private sector renewal activity delivering decent homes by both local authorities and housing associations. The use of the greater freedoms available to local authorities since the Regulatory Reform Order was implemented in 2003 needs to be extended as much as possible to extract the maximum impact from available resources, and approaches such as equity release schemes offer the prospect of bringing in resources from the private sector in a more focused way than has been possible in the past. 53 There are pockets of poor quality housing in every part of the North West, and there will always be a need to intervene to deal with small numbers of problematic properties. Beyond that, however, there is perhaps a question as to whether strategies for improving housing conditions can or should be separated from wider integrated approaches to regeneration and renewal, whether at neighbourhood, district or even sub-regional level.

54 Indeed, the Northern Way Growth Strategy expresses concern that, by pursuing the Decent Homes agenda in the social rented sector in too isolated a manner, we risk undermining broader strategies to restructure housing markets by retaining housing stock which might be better cleared and redeveloped. That this also implies that resources are currently being diverted to bring properties with an uncertain future up to the Decent Homes standard is a concern in itself.

55 The suggested regional priority is to:

Priority 3.1 Improve the condition of housing stock with a sustainable future as part of broadly based regeneration strategies, particularly in areas of concentrated unfitness and disrepair.

Questions:

23. Is this priority (unchanged from the current Strategy) still appropriate? Will it deliver effective action on the issues discussed under this Strategic Priority?

24. Is dealing with stock condition still a separate priority for the North West? If not, what does that mean for the other strategic priorities set out in this paper? Strategic Priority 4:

Meeting the region’s needs for specialist and supported housing

Key issues:

 The potential to take a medium/long term view of trends, particularly in relation to the ageing population, and understand the implications for future housing requirements

 How to tackle this agenda in a way that brings it out of the ‘silo’ it can often appear to be – there are important links to the other three priorities and these need to be spelt out

 How the Board can take a strategic approach across such a complex range of needs, and without direct influence over revenue funding

 Whether recent increases in homelessness are likely to continue, and the implications that has in terms of need for new specialist provision

56 The current Regional Housing Strategy outlines in very general terms some of the headline issues for the North West under this heading. The new Strategy needs to develop this further if it is to help bring about a more strategic approach within the region, and the Board have commissioned work to help achieve this.

57 However, some of the key elements are already clear. The ageing population of the region is one demographic trend which can be mapped into the future with a high degree of confidence, and is increasingly emerging from local and sub-regional work as an issue rising up strategic agendas. The Strategy needs to explore both the very specific housing and support needs of more infirm older people and the much broader needs and aspirations of older people living in their own homes.

58 Recent increases in homelessness have seen the North West become second only to London in terms of numbers of households in priority need accepted by local authorities, now running over 18,000 per year, having been around 13,000 only two years ago. These trends need to be understood in terms of their relationship with more general changes in housing markets. But this should also be matched with a strategy for plugging any gaps in provision, perhaps through collaborative working at sub-regional level. 59 Matching revenue and capital funding in delivering new provision continues to be a huge source of difficulty. General uncertainty and concern about the future levels of funding available through the Supporting People programme remain even now the details of the 2005/06 allocations are known.

60 There is a question as to how far a Regional Housing Strategy can or should go in tackling this whole area in detail. Given the range of client groups, the local and sub-regional variations, the need to consider issues such as the specific needs of different black and minority ethnic communities, the issues around provision in rural areas, and so on, there is a danger that an over-simplified approach could be taken which would fail to exploit the potential gains from effective working at a regional level.

61 One option would be to supplement the Strategy with a Regional Supported Housing Strategy. At least one other region has already decided to adopt that approach. In practical terms, this might benefit from the analysis offered by the forthcoming five-year Supporting People strategies from each of the North West’s 22 commissioning authorities. This would have implications in terms of the capacity the Regional Housing Board would need to devote to the development of a separate Strategy, and would need to be carefully handled to ensure that this is not seen as somehow relegating supported housing from the top line of regional issues.

62 The suggested regional priority is to:

Priority 4.1 Ensure a range of specialist and supported housing is available, appropriate to local needs and strategies, and integrated with relevant support and care services.

Questions:

25. Is this priority (unchanged from the current Strategy) still appropriate? Will it deliver effective action on the issues discussed under this Strategic Priority?

26. Should the Board commit to develop, with stakeholders in the region, a North West Supported Housing Strategy as a ‘daughter document’ to the Regional Housing Strategy? Action and investment plan

63 Another area the Board are keen to develop in the new Strategy is a clearer link between the priorities set out and action to deliver those priorities. The realities of the scale and complexity of the region and the issues the Board deal with means that this will need to remain at a relatively high level, but it is important to give a clear indication of the respective actions and lead responsibility for the Board and partners.

64 This might include:

 Flagging up opportunities for investment, particularly from the private sector, but also from public and voluntary sources

 Some practical lessons from work the Board has commissioned on learning from past and current regeneration and other programmes

 Indications of the broad direction of Regional Housing Pot allocations, leaving the detail for a separate allocation strategy document

 Strategic development activities continuing under the auspices of the Board, including lessons from the Commissioning projects on private sector renewal and affordability issues

 The Board’s priorities in seeking to influence national and cross- regional policy development

Questions:

27. What else do you think might be included in an action plan?

28. Does all of this belong in a strategy document, or does an action plan need to be separate and more regularly updated? Allocating the Regional Housing Pot

65 Finally, it is proposed that a separate document will contain the specific Regional Housing Pot allocations strategy. This will include detailed reporting/monitoring of existing programmes and emerging outcomes, and would be updated at least for each allocation cycle (every two years), or potentially more frequently. Annex A

Summary of questions for consultees

Vision

1. What do you think the purpose of the Strategy should be ?

2. Who should it be aimed at ?

3. How have you used the current Strategy ?

4. Do you have any case studies that demonstrate how the Strategy has influenced your thinking and delivery of priorities ?

5. Does this vision, from the 2003 Regional Housing Strategy, still provide a statement of where the region needs to be going ?

Housing Markets in the NW

6. Does the picture painted by the CURS report match with your perceptions of the housing markets you are familiar with in the North West ?

8. What are your views on the issues noted above? Can you help the Board by providing evidence on the situation in parts (or all) of the region ?

9. Are there other issues you feel the Board needs to consider here ?

The Board’s Priorities

Spatial Priorities

10. Do you agree that the Board need to set explicit geographical priorities? Do these still need to sit alongside thematic priorities ?

11. What are your views on the sub-regional classification suggested, both on the principles applied and in relation to your own local area? Does it go far enough? Have you a better approach ?

12. How should the Strategy’s approach relate to existing ‘traditional’ sub- regions, Northern Way city regions, Housing Market Renewal Pathfinder boundaries, travel to work areas ? 13. Are some issues sufficiently universal to make a sub-regional approach unnecessary ?

Strategic Priorities

14. Are the four priorities, updated and developed over the next few pages, still the right ones for the North West ?

15. Should the priorities be weighted to give more of a sense of relative importance ? If so, how could this be done ?

16. Did the inclusion of cross-cutting themes have an impact on your thinking, strategy development and action? Should the new Strategy address these issues in a different way ?

Strategic Priority 1

17. Are these more detailed priorities right? Will they deliver effective action on the issues discussed under this Strategic Priority ?

18. Do you think the Regional Housing Strategy should set specific targets for housing clearance? How might those be arrived at ?

19. Is this where the need for high quality housing to attract the ‘knowledge workers’ identified in the Northern Way Growth Strategy should be addressed?

Strategic Priority 2

21. How should the new Strategy deal with rural issues ?

22. Would affordability targets below regional level be helpful? How should they be set and monitored ?

Strategic Priority 3

23. Is this priority (unchanged from the current Strategy) still appropriate? Will it deliver effective action on the issues discussed under this Strategic Priority ?

24. Is dealing with stock condition still a separate priority for the North West? If not, what does that mean for the other strategic priorities set out in this paper ?

Strategic Priority 4

25. Is this priority (unchanged from the current Strategy) still appropriate? Will it deliver effective action on the issues discussed under this Strategic Priority ?

26. Should the Board commit to develop, with stakeholders in the region, a North West Supported Housing Strategy as a ‘daughter document’ to the Regional Housing Strategy ?

Action and Investment Plan

27. What else do you think might be included in an action plan ?

28. Does all of this belong in a strategy document, or does an action plan need to be separate and more regularly updated ? Annex B

References

Delivering stability: securing our future housing needs, Barker Review of Housing Supply Kate Barker, HM Treasury, 2004 http://www.hm- treasury.gov.uk/consultations_and_legislation/barker/consult_barker_in dex.cfm

Housing and Planning in the Regions: Consultation Paper. Office Of The Deputy Prime Minister, September 2004 http://www.odpm.gov.uk/stellent/groups/odpm_housing/documents/downloada ble/odpm_house_030963.pdf

Housing Markets: Preparing for Change, Jacqueline Blenkinship and Judith Gibbons for Impact Housing Association and the Housing Corporation, 2004 http://www.impacthousing.org.uk/HousingMarkets.htm

Housing Market Trends in the North West of England, Philip Leather and Jonathan Roberts, Centre for Urban and Regional Studies, University of Birmingham, August 2004. http://www.nwrhb.org.uk/articleimages/CURS%20final%20report%2027-08- 04.pdf

Regional Economic Strategy 2003, Northwest Development Agency http://www.nwda.co.uk/publications.aspx? publications=1&area=78&subarea=81&publicationview=1&item=2003328550 720663

Regional Housing Strategy 2003, North West Regional Housing Board http://www.nwrhb.org.uk/pdf/RegionalHousingStrategyfinal.pdf

Regional Planning Guidance for the North West, Government Office for the North West, 2003 http://rpg.nwra.gov.uk/documents/download_file.php?id=87

Northern Way Growth Strategy and Truly Sustainable Communities technical appendix, The Northern Way Steering Group, September 2004 http://www.thenorthernway.co.uk/index.html Annex C

The Housing Market in the North West CURS, University of Birmingham, 2004

Summary of main findings

1.1 This study was primarily concerned with charting and explaining change rather than putting forward recommendations. The main conclusions to be drawn from this analysis of North West house prices over the 1996-2003 period are as follows:

 There were comparatively sharp increases in prices across the North West region in 2002 and 2003 and prices were still rising steeply at the end of this period, suggesting that the trend has continued into 2004.

 Detached houses and flats achieved the greatest increases and terraced houses fell further behind other dwelling types.

 Higher priced areas experienced the greatest increases, so despite a decline in the numbers of very low value sales, the gap between higher and lower priced areas grew wider.

 Prices in the Pathfinders have undoubtedly increased in 2002 and 2003, but generally at a lower rate than the regional average.

 The lowest priced areas in the region remain concentrated in the Pathfinders and a few other areas such as Bolton, Barrow and West Cumbria.

 The proportion of extremely low price sales in the Pathfinders declined. This may have given an impression of generally rising prices in these areas, but there was no real improvement in the proportion of sales in Pathfinders which were below the regional lower quartile threshold. Typically there were three times as many sales below this threshold as would be expected if prices were even across the region.

 Levels of high price sales increased across the region and the number of areas with higher median price to income ratios increased sharply.

 Despite rising prices, the North West (and the other Northern regions) lost ground against the rest of the Country over the 1996-2003 period.

1.2 Most of the drivers of changes in dwelling prices affecting the region are national in impact, that is they apply in most parts of the country rather than being specific to the region. They include:

 rising real incomes for many, underpinned by stable economic growth, enabling households to pay more for housing;  historically low interest rates, making it possible to afford larger loans;  easier access to mortgage credit;  increased financial support from families to first time buyers;  strong demand from first time buyers, including some demand brought forward by the desire to share in rising prices;  increasing demand from speculative purchasers, buying to let rather than for owner occupation;  changing demand arising from migration including continuing subregional decentralisation from cities to suburbs and rural areas, net in-migration from abroad into urban centres, notably London, and temporary demand from asylum seekers and refugees;  historically low levels of new construction, arising from a variety of causes.

1.3 Speculative demand, rather than demand from potential occupiers, has been responsible for the most well-publicised increases in prices in areas such as inner Liverpool. It is doubtful whether these increases are sustainable, many speculative purchasers who entered the market recently are likely to find it difficult to attract tenants and to obtain a return on their investment. Nor is there any evidence that increasing values in the older terraced stock has led to any increase in investment in repairs or improvements to attract tenants. However, there is a real danger that the expectations of speculative purchasers will make voluntary acquisition for clearance more difficult and increase the eventual prices at which properties in Pathfinder areas are acquired through CPO.

1.4 Some further element of the rapid increases in prices in the North West in 2002 and 2003 can also be attributed to ‘boom’ conditions when demand is mainly fuelled by the expectation of further rises.

1.5 Opinion on the wider sustainability of recent house price rises is divided. Some sources predict substantial falls, some a ‘soft landing’, and others continued growth. The key factor is likely to be interest rates and the costs of borrowing.

1.6 The growth in speculative purchase to let has also undermined the mechanism whereby price rises are limited by what first time buyers can afford. First time buyers are increasingly in competition with other purchasers using capital accumulated through other forms of investment, who are less constrained by income levels. This has been one of the main factors contributing to the current affordability crisis and may sustain prices in the future or at least prevent significant falls.

1.7 Better evidence on the motivations and intentions of buy to let investors is needed to anticipate the future impact of this sector.

1.8 Despite price rises, there is no real evidence from this study of a recovery in the demand for terraced housing. In areas where terraced dwellings command high prices, it is the characteristics of the neighbourhood which generate these prices. But it is more important to identify the factors which cause dwellings to become obsolete, and to demolish or transform these properties, rather than to assume that all older terraced housing is obsolete.

1.9 Price rises at the lower end of the market may have implications for the Housing Market Renewal Pathfinders and for related programmes of public investment. They will put pressure on the unit costs of acquisition and raise owners’ expectations. If prices fall back, some owners (both owner occupiers and landlords) may experience negative equity or face a loss and this may delay both voluntary and compulsory purchase.

1.10 The study has shown that the housing market in the North West has entered a phase of change after a period of stability. This has occurred at a point when central government, local authorities and other bodies have embarked on the most substantial programme of market intervention for decades. It suggests that close monitoring of the market is required to identify and react to developments at as quickly as possible.

1.11 Understanding of the market is limited and the ability to predict future developments is more limited still. We lack models to predict future developments even in the short term, making it all the more important to identify new trends as they emerge and to react quickly to them.

1.12 This analysis in this study should be regularly updated, perhaps quarterly but at least on a six-monthly basis. Soft data is useful but there is no substitute for hard data on achieved price changes. Land Registry data is limited in its scope however and there would be great merit in extending the data collected through this source to include dwelling age and other data.

1.13 To supplement Land Registry data, market intelligence is required from other sources. Evidence from estate agents is of some value, but agents lead or create rather than analyse markets and have a direct financial interest in increasing prices or turnover. Their views should be treated with caution, and are of most value at local rather than sub- regional or regional level.

1.14 District Valuers are also more likely to provide an objective view of market developments and they operate in and have experience of the lower sectors of the market on a regular basis. This is a promising channel which the Board should explore further.

1.15 An increase in speculative purchase is one of the key factors affecting markets in the region, especially at lower value levels. Good data on the private rented sector is a priority requirement for understanding markets better.