1. Apologies had been received from Mr Bond.
2. The Chairman welcomed guests and members and explained the background to the Affordable Housing Select Committee.
3. A Member asked that witnesses consider good affordable housing outside of Kent in their answers and the discussion.
4. Bob Heapy explained that Town and Country Housing Group was a charitable provider of housing operating in Kent and Sussex. It developed around 400 homes per year and in May 2019 it merged with Peabody Trust.
5. Kerry Kyriacou explained that Optivo had over 45,000 homes across London, the South East and the Midlands. He suggested that when looking outside of Kent Cambridge would be a good location with challenges with affordability and some excellent ideas.
6. A Member asked what would an affordable house be if it were linked to wages, would it be twice, three times the available wages for example. This was a difficult question to answer, the hope was that ‘affordable homes’ were affordable to someone on benefits. With regards to shared ownership this varied depending on location and market conditions. In any event there was a dichotomy between East and West Kent in terms of affordability and market. Social rents were based on a framework prescribed by government with affordable rent linked to the local market. It was hoped that the rents would be as low as possible but as soon as this was lower than Homes England charged companies couldn’t afford to buy the land.
7. The guests confirmed that both their organisations were charities, this meant they were favourable because they did not pay corporation tax and the profits generated were reinvested into more homes or better service.
8. A Member asked whether the organisations had difficulty buying land or whether there were problems with planning permission. Mr Kyriacou explained that all homes built were lifetime homes, it was their intention to maximise affordable housing but if a house builder purchased the land they wanted to maximise value and this could lead to minimising affordable housing. Whilst committed to buying the land the organisations recognised that they were in competition with developers. It was vital that the planning authority retained the importance of affordable housing.
9. Mr Heapy explained that he had had mixed experiences with planning authorities, some were very good with open conversations and others were more difficult. Regarding Council owned land the experiences were mixed.
10. In response to a question about Parish Councils, Mr Heapy explained that they did work with Parish Councils, Town and Country Housing were convinced that small rural interventions made a difference to supporting rural communities.
11. A Member asked how best KCC could support affordable housing schemes and the guests explained that any influence on planning authorities was beneficial, the intention was to make schemes sustainable and to keep communities together.
12. A Member asked how borrowing would be affected in the future with increased borrowing costs. The guests explained that if it cost more to borrow this reduced the capacity to build. If the cost of borrowing was to go up the organisations would look to deliver efficiency savings to support development of new homes.
13. Referring to Parish Councils Members discussed the fact that many wanted a scheme which would remain in local control in perpetuity. There was also many residents who were critical of the right to buy scheme and who suggested it should end. Mr Heapy explained that he was not a huge fan of right to buy as it took the social housing out of the market. However, where it was possible to sell homes at a premium it could result in more homes being built elsewhere. In any event right to buy was a small part of both organisation’s business, it was a handful of homes per year.
14. A Member commented that KCC had a policy of investing pension funds only outside of Kent. Why was KCC not investing in housing inside Kent? The guests did not see any reason why KCC could not invest in Kent Social Housing. It might not be the highest return but it would be steady and safe. Both organisations were fully engaged with Kent Housing Group which was a great vehicle to get the affordable message across the county.
15. In response to a question about how best KCC could help to meet the housing needs of older residents and disabled people the guests explained that both organisations built lifetime homes but did not deliver care and support services. This was bought in. There was perhaps a gap between the conversations had and the partnership working between the landlord and the care provider.
16. A Member commented that KCC was a major landowner which was interested in affordable housing. If KCC decided to create a vehicle that enabled it to act at arms length and become an affordable housing provider in its own right how would the market regard that? Mr Kyriacou explained that being the landowner it would be KCC’s intention to maximise the value but have more strategic objectives about what it wanted to achieve from the land. It would be advisable to find a joint venture partner so KCC had full control, this partner would help fund and manage and then both parties could share in any profits that arose from the land and make future decisions. The guests were clear that it was necessary to take advice, lots of house builders offered joint venture opportunities but many were unequal. The joint venture model was good providing the partners were aligned, housing associations were probably more aligned. Mr Kyriacou explained that he had been an independent director on three local authority housing development companies.
17. A Member asked whether there was a wider role in terms of the management of housing stock, staffing was quite challenging particularly regarding technical skills.
18. In response to a question about key worker homes Mr Kyriacou explained that his organisation was but it was not a very big part, there was approximately 700/800 homes out of a portfolio of 45,000. The challenge was to ensure that the homes were to people in most need, not necessarily key workers.
19. Referring to the local housing allowance, because the rate was not keeping up with other market factors, was it sufficient for business. Mr Heapy explained that it was about viability and this was linked to location. The other issue was regarding developers looking for an immediate return where housing associations can be patient investors.
20. Referring to environment standards, homes were built to a high environmental standard, there were challenges with existing stock which needed to be brought up to an existing level. There were competing demands for financial captaincy to build new homes or invest in existing homes.
21. The Chairman concluded by asked whether there was anything else KCC should or could do, the guests explained that KCC’s ability to lobby either Central Government or Homes England regarding infrastructure, who is responsible for funding this and how it is achieved.
22. The Chairman thanked the guests for attending the Select Committee and for their helpful responses and he explained that the evidence would be typed up and shared, if the guests had anything else they wanted to feed into the process it would be welcomed.