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HOUSING POLICY REVIEW PROGRESS REPORT
JULY 2003
1.1 In November 1999 the Minister for Local Government and the Environment laid before Tynwald a Housing Policy Review and later undertook to provide regular Progress Reports on the implementation of the recommendations in the Review. 1.2 Progress on recommendations contained in the Review and the four subsequent Progress Reports; in particular the July 2002 Report is reported as follows.
2.1 'Maintain construction targets of an average of 80 units per annum over 5 years'
As part of the 2002/3 Policy and Budget review process the target was increased to 120 units per annum including replacement units. During the calendar year 2002 ninety-six public sector units were completed. A further two hundred and fifty units are scheduled to commence in 2003. Appendix A shows that the target will be exceeded over the 5 -year period by 187 .
(a) The promotion of home ownership through the provisions of First Time Buyer Homes is discussed in more detail under Section 3. To date however some 139 homes have been completed and sold to first time buyers and this total rises to 163 if allocations for partially completed developments are taken into account. In addition 200 first time buyers have acquired homes in the private sector at prices under $£ 90,000$.
In total the House Purchase Assistance Scheme has enabled 363 first time buyers to acquire or be allocated homes.
(b) The Department has further developed the Register of First Time Buyers. Appendix C shows an analysis of the Register at 23 May 2003 which confirms that interest is constantly increasing. The Register is to be reviewed in June 2003 as part of an ongoing process to ensure information is up-to-date. Allocation of First Time Buyer properties is undertaken using a pointing system which reflects an applicants personal circumstances, family size, connection with an area through work or family, their preferred area and the suitability of the available property. Additional points are awarded to public sector tenants wishing to purchase to encourage the freeing up of rental properties. (c) Several allocations of first time buyer properties made to public sector tenants have not been accepted which may indicate that heavily subsidised rents are more attractive than mortgage repayments. (d) A complete review of all applicants will be commenced in the near future.
(a) Uniform criteria for acceptance on to general housing waiting lists and for allocation of properties has now been implemented across all housing authorities after approval by Council of Ministers in January 2002. (b) An amendment to the income limits was approved by Council in May 2002 for singles and couples with children. The original limit of $£ 24,000$ p.a. income limit for all applicants was amended to include $£ 2,000$ for each child to a maximum of $£ 30,000$ p.a. (c) Waiting lists at 31 December 2001, prior to introduction of the new criteria, showed a total of 995 applicants for general housing across all housing authorities. At 31 December 2002 the total figure was 971 and now includes a substantial number of applications from single people who previously had been ineligible for inclusion. This indicates that a number of ineligible applicants had been removed from waiting lists and that there have been a significant number of allocations. The total figure of 971 applicants at 31 December 2002 includes 396 applications from single people which in comparative terms mean that waiting lists have reduced. Appendix D shows the latest analysis of the Public Sector waiting list. (d) The Council of Ministers has confirmed that the pilot period of twelve months be extended and has also agreed to a recommendation that the upper limit of a maximum of ten points for
time waiting on a list be removed. This will enable an applicant to acquire one point for each three-month period on a list and thereby improve their chance of allocation over time. (e) Uniform criteria for acceptance on to sheltered housing waiting lists and for allocation of properties was approved by Council in September 2002 and is currently being implemented. This exercise has highlighted the fact that many applicants are private home owners with large amounts of equity in their houses. The Department is therefore considering a proposal, similar to First Time Buyer Schemes, which would encourage owners to buy sheltered or retirement housing provided on an equity release basis rather than apply for public sector sheltered housing. The Department is also encouraging Developers to give greater consideration to the development of properties for the retirement market.
3.1 'House Purchase Assistance Scheme (HPAS 1999) to be adjusted to take into account movements in house prices and incomes as soon as possible' (a) In July 2002 Tynwald approved the House Purchase Assistance Scheme 2002 (HPAS 2002). The new Scheme has provision for top up loans as well as the grant assistance provided under HPAS 1999. The Department considered that to keep increasing the grant provision and purchase limits under HPAS 1999 (maximum $£ 16,500$ and $£ 85,000$ respectively) would have increased inflationary pressure when average house prices were already rapidly rising and without the benefit of increasing the supply of affordable housing. Trends in house prices are shown at Appendix E and indicate that price increases have slowed dramatically in the lower $40 \%$ of house price transactions over the last two years, down from a high of $33 \%$ to $11 \%$. (b) Financial assistance provided under HPAS 2002 requires the purchaser to fund $70 \%$ of the cost, which can be grant supported for those on lower incomes, with the Department providing the balance of $30 \%$ as a low interest, flexible top up loan ( $1 \%$ below base rate). The Department has retained the grant element without the top up loan provision for older properties up to a value of $£ 90,000$. It is acknowledged that this figure is well below average prices at the lower end of the market but is retained to provide assistance with the purchase of older properties or apartments and again reduce inflationary pressure. (c) In partnership with developers the Department has embarked on a programme to deliver 600 new homes over a five year period 2002/3 to 2006/7. These are 2 bed apartments and 2 and 3 bed family size homes ranging in price from $£ 105,000$ to a maximum purchase price of $£ 130,000$. They are being allocated to those on the Register of First Time buyers. By
producing new build properties rather than increasing grant support for properties on the open market the Department is endeavouring to stabilise prices at the first time buyer end of the market. This strategy along with a change in the housing market appears to be having the desired effect. (d) The Department will be proposing amendments to the HPAS 2002 in due course to cater for reasonable inflation and offer further options for second time buyers who need to move on to a larger property because of increase in family size.
(a) Applications for inclusion on the Register have steadily increased from 578 at the end of May 2002 to 1080 at the end of May 2003 (see Appendix C). It should be noted that 240 of the single applications declare an income of $£ 15,000$ or less per annum which would indicate that interest may be aspirational or registration is clearly a marker for the future as younger applicants increase their income. (b) All on the Register were contacted in October 2002 and provided with a schedule of developments underway and ready for allocation. Each was invited to advise of any change in circumstances prior to allocation. Ninety-one properties were allocated during November and December. 161 offers were made with 91 acceptances and 70 either refusing or failing to respond to offer letters. (c) The Register will be updated in July 2003 and a further schedule of forthcoming developments provided to all those registered.
4.1 'Maintain current construction targets of at least 400 dwellings per annum (including public sector provision) over five years' 2002/03 to 2006/07 (a) In the calendar year 2002 a total of 623 dwellings were completed with a further 311 under construction at the year-end. This momentum needs to be maintained in the short term if the backlog of housing demand is to be met. (b) Original targets in the 1999 Housing Policy Review Report recommend construction of an average of 80 first time buyer units and 80 public sector homes per year over a five year period these targets have subsequently been increased to 120 per year. The schedule of schemes for
first time buyer and public sector projects are shown at Appendices A and B and it should be noted that public sector housing (including replacements) is ahead of target. (c) First Time Buyer housing targets can however only be achieved in the short to medium term by bringing forward unzoned land for planning permission. The Department is currently preparing applications for Johnny Wattersons Lane and Ballanard Road in Douglas as these sites would help to meet the high demand in Douglas, Braddan and Onchan. The First Time Buyer Register indicates a first preference in these locations by 825 applicants, whilst proposed sites would only satisfy 172 applicants. These two sites are therefore crucial if the targets of 600 First Time Buyer homes is to be achieved.
4.3 'Policy to be considered in respect of ensuring that zoned land is developed within a reasonable time frame' 4.4 'Planning Development Programme and Capital Funding Procedures need to be reviewed to speed up delivery of 4the construction programme' 4.5 'Planning Policies should ensure that area plans and planning applications contain some affordable housing'
The Housing Task Force reported to July 2002 Tynwald on the possibility of introducing fiscal or other measures to influence the early development of zoned land.
It reported that, in the short-term and subject to planning approvals, sufficient land is now being developed to meet Government's targets for housing. In the medium-term, Government should be prepared, if necessary, to approve additional housing development on land which is otherwise suitable for housing development but is not actually zoned.
New build statistics for 2002 show that targets were exceeded with 623 properties completed and 311 under construction at the year-end. To meet targets for affordable housing, the
Department intends to submit planning applications for homes on unzoned land at Ballanard Road and Johnny Watterson's Lane, Douglas.
In the medium-to-longer-term, the introduction of a new Strategic Plan and the acceleration of the Area Plans should identify sufficient additional land to meet overall demand including affordable housing.
Negotiation with developers has also encouraged a degree of partnership working, which has resulted in an increased supply of first-time buyer housing. Proposals in the Strategic Plan would make it compulsory for developers to provide a proportion of affordable housing in the future.
Compulsory purchase is a power that Government and Local Authorities can threaten to use in extreme circumstances. The availability of this power has been used to influence negotiations over the development of land.
On balance, the Housing Task Force considered that existing powers, properly used, and changes being proposed to the Planning system negate the need to introduce fiscal or other measures at this time.
6.1 'Additional funding needs to be sought to ensure that housing projects and proposed schemes are delivered within optimum time frames' (a) The current DLGE capital programme, £20m Housing Reserve Fund and LA programme (Pink Book pages 1, 63 and 70) provide adequate funding and enough flexibility to deliver projects within achievable timeframes. (b) The Local Authority new build and planned maintenance programme is now substantial and further consideration must be given to the impact on Housing Deficiency Support in the medium to long term vis-à-vis rent levels. This issues will be considered in more detail in a soon to be published report "Public Sector Housing - Discussion Document".
7.1 'The recommendations of the EPIC report need to be progressed and additional funding sought' (a) The Department has now targeted resources to identify empty properties, trace owners and investigate how these properties may be brought back into use. (b) The Department is also currently undertaking a review of the House Improvement and Energy Conservation Scheme. It is anticipated that a revised scheme could include provision for financial assistance for the improvement of these properties subject to adequate funding (see paragraph 7.6).
(a) Discussion with other Departments and agencies is ongoing. (b) Regular meetings with all local housing managers are held to discuss common issues and to develop a common approach to problem solving. A Common Tenancy Agreement is to be introduced for all public sector tenants to ensure that public sector tenants Island wide are treated fairly and reasonably. (c) The Uniform Criteria for allocating properties does favour those in the greatest need. The latest amendment should however assist those who have been on a list for some time and were previously unable to acquire sufficient points to be allocated a property. (d) Council of Ministers has approved a recommendation that couples with children are granted joint tenancies, even though both may not be residentially qualified. This will assist adjudication in the case of domestic violence which has previously disadvantaged the unqualified partner.
This role of Housing Associations will be considered in a soon to be published report titled "Public Sector Housing - Discussion Document". This report will raise issues regarding the rational provision, management, maintenance and funding of public sector housing.
This is ongoing work and the new document will include guidance for the refurbishment and planned maintenance of Public Sector Housing.
A substantial increase in funding for the Local Authority and DLGE planned maintenance programme has been approved subject to the normal annual budget process. The programme and funding is satisfactory in terms of industry capacity and the ability of officers to manage the programme. Tenants now need to be informed of the five year programme so that they can plan ahead for their own decoration and improvements.
The current scheme has been successful in providing financial assistance to eligible applicants. In the 12 month period to 31 March 2003, 254 applications for grant assistance totalling $£ 457,000$ were submitted for improvement and energy conservation work. The Department is however carrying out a review which will determine whether the Scheme would be more effective if it were to prioritise as follows:
8.1 The Department has, with the support of the Treasury, made substantial progress towards the delivery of accelerated programmes for the provision, rebuilding and planned maintenance of affordable homes. 8.2 In the short-term land provision is adequate for housing subject to normal planning approvals and receiving approval for building homes on unzoned land at Johnny Wattersons Lane and Ballanard Road, Douglas. In the medium to longer-term the Area Plans must identify more
land for residential development. Affordable housing must also be mandatorily provided as part of residential developments as proposed in the draft All Island Strategic Plan. 8.3 Funding for affordable housing must be maintained whilst housing demand exists from those who need genuine support. This funding should however be linked to what people can afford and further consideration must be given to this matter as the consequences for ongoing public sector housing deficiency payments are major in the medium to longer term.
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