Growth Strategy 2016 final

leadership

viability

customers

growth

support

GROWTH

STRATEGY

2016 - 2020

2

mission

vision

values

Homes people choose

Pride Passion Respect Innovation Teamwork

Deliver quality homes, build communities & improve lives

MA CD O C LD NA OURT

In delivering our vision, we expect to achieve a number of key outcomes: Provide a choice of good quality homes and services.

Deliver excellent services tailored to the needs of individual residents, with additional support for those who need it.

Support the development of vibrant, sustainable communities.

Continue to provide new homes, working within financial constraints.

corporate objectives From the Corporate Strategy 2016-2020

The key corporate objectives we are seeking to contribute towards in this strategy are: • Achieve sustainable growth from the delivery of new homes and new forms of home ownership • Ensure we at least maintain the total number of social rented stock • Maintain financial strength and resilience • Deliver efficiency through value for money through innovation in all we do to maximise financial capacity for reinvestment in services and new homes.

Pride in everything we do Passion for excellent customer services Respect for everyone Innovation for improvement and value for money Teamwork for results

decisions to ensure we are using our assets to their full potential to further our social aims. We will remain true to our social values by continuing to provide affordable homes for rent as we realise that there will always be people who will not be able to

T

own their own home.

Wealden areas. We currently own 9,247 homes

and grant funding no longer available for rented

(as of 1st January 2016) and in addition we own

housing, the affordable housing led projects are a

the freehold interest for 455 leasehold properties.

thing of the past.

Our purpose is “to deliver quality homes, build

The growth model is now heavily focused on the

communities and improve lives�.

creation of subsidies by registered providers by

This strategy sets out our approach to delivering

using non charitable activities such as selling

new homes and for making the best use of our

homes on the open market.

assets to meet our objectives. We are aware

We will deliver new homes within strict financial

of the increasing pressures caused by a lack of

constraints so as not to impact on our financial

affordable housing, particularly in the South-East

viability, whilst ensuring we further our overall

and therefore we will continue providing a range of

charitable aims. This will include protecting the

housing products to meet the needs of our existing

number of social rented homes that we own

and prospective customers. We will monitor the

and manage by replacing those lost through the

return on assets of individual properties and take

voluntary right to buy.

own and Country is an independent

The strategy has been developed at a time of

provider of innovative housing

dramatic change in the operating environment

solutions and related services

for housing providers, which we have reflected in

operating mainly in the Kent and

our plans for growth. With rent reductions in place

4 Themes & objectives The Growth Strategy has been organised around four themes.

These themes, their drivers, objectives and targets relating to each one are:

1

developing new homes

o

Drivers: • The National Housing Federation estimates that an additional 243,000 new homes are needed in the UK every year (approximately 8,500 in the Kent area or 1.5% growth).

• The Government’s policy is to promote home ownership (shared ownership, Starter Homes and homes for outright sale) • The affordable housing requirements within section 106 planning obligations have been relaxed.

• The need to protect social housing assets by ensuring we remain within our gearing constraints, whilst ensuring we help meet housing need by maximising growth.

ctive e j b

Build new homes across a range of tenures, including homes for rent, shared ownership and outright sale.

targets 1. Develop new homes at a rate of 5% to limit debt to asset ratio to a nominal amount.

2. Explore the development of Intermediate and Social Rent properties as an alternative to the provision of Affordable Rent homes.

3. Replace any homes sold under the Voluntary Right to Buy so there is no net reduction in our social rented homes 4. Enter into joint venture partnerships to deliver on significant sites within the region in order to share costs and risks.

5. Limit any increases in gearing as a result of our development programme to 0.3%

5

2

maximising value from our assets

o

Drivers: • The Regulatory Framework (Value for Money Standard) states that providers must have a strategy for optimising the future returns on assets. • There is a need for housing providers to respond to demand, for example by selling low demand properties and sites such as garages that are attracting antisocial behaviour. • Fuel poverty remains a problem for many households, with approximately 2.3m households in England (approximately 10% of households) living in fuel poverty.

ctive e j b

Optimise our return on assets by selling inefficient assets and expensive to run homes

targets 1. Dispose of 40 homes per year by examining in detail the properties that will deliver the greatest benefits to TCHG, be it reducing liability or maximising returns. Utilise surpluses created to increase growth and invest in energy improvements with our existing stock.

2. Review all garage sites to ensure they are producing a positive return or are providing value to the community. Consider options such as redevelopment or sale where appropriate.

3. Carry out an annual review of older persons housing to respond to demand patterns and redevelop or dispose of unsuitable properties 4. Assess potential regeneration models at Showfields.

6

3

approach to delivery

o

Drivers: • Construction standards for new homes built by social landlords are being simplified. • There is increased emphasis by the Social Housing Regulator on value for money, which includes reducing costs without affecting the quality of homes. • The Regulator has emphasised the need to mitigate exposure to the housing market when developing homes for sale.

ctive e j b Reduce building construction costs while continuing to provide good quality homes

targets 1. Reduce construction costs so they are in the lower quartile of costs compared to peers.

2. Establish buying agreements for core components including finishing items to support giving customers greater choice of specification.

3. Expand the Construction Management model to deliver all sites of less than 10 homes subject to tender.

4. Revise the contracting arrangements for JCT Design and Build contracts to reduce risk.

5. Introduce standard house types for 2 and 3 bed houses.

6. Carry out a feasibility study into the use of modern methods of construction linked to our standard house types.

7

4

developing a sales brand

o

Drivers: • Reduced Government grants make it essential to maximise surpluses from homes that are built for sale in order to reinvest in further new homes.

• There is a severe shortage of housing (of all tenures) in the South East and currently only about half the number of new homes needed in each year are being built 1.

• There is a need to make efficiencies throughout the organisation in order to meet our business plan targets. (This includes efficiencies in the cost of selling shared ownership and outright sale properties).

ctive e j b Ensure homes are sold within agreed timescales whilst minimising overheads

targets 1.

2.

3.

4.

5.

Launch and expand the “Love Living Homes” brand and a flexible equity product.

All shared ownership and outright sale homes sold within 90 days.

Sell 25% of homes directly without the use of sales agents in order to generate savings.

Achieve a minimum of 15% surplus on private sale projects.

Introduce a package of finishes and products from which prospective buyers can choose to fit out their home prior to completion.

1 According to the National Housing Federation the total number of homes needed in 2014/15 in the South-East was 41,700 and only 21,890 were built, leaving a shortfall of 19,810 homes.

leadership

viability

customers

growth

support

conclusion This strategy provides a framework to achieve sustainable growth by maximising the value from assets. It intentionally provides fewer objectives than in previous versions in order to provide greater focus. The strategy will be used to develop a more detailed action plan, which translates the objectives into specific actions.

Monson House Monson Way Tunbridge Wells Kent TN1 1LQ 01892 501480 www.tchg.org.uk