DELIVERING OUR NEW HOMES 2019-2024
DEVELOPMENT & GROWTH STRATEGY
SUMMER 2019
INTRODUCTION
WHAT IS IT THAT THIS STRATEGY INTENDS TO DELIVER?
Accent Group owns and manages around 20,500 homes in 68 local authority areas in the north, east and south of the UK. This strategy sets out the core development areas for new homes that are intended to consolidate our stock base in our key areas of operation. It will improve the overall quality of our housing portfolio and the financial performance of our asset base.
The Development and Growth Strategy sets out how Accent Group will make a meaningful contribution to alleviate the significant shortfall in affordable housing provision in the areas in which we work over the next five years. This strategy sets out an action plan that will deliver a fundamental step change in the way Accent delivers its affordable homes programme by transitioning from a small largely developer dependent S106 led pipeline, to a well-managed, significantly larger, fully funded, independent land led programme.
This will involve the redevelopment of obsolete and poor performing homes and could in the long term, involve some stock rationalisation.
The strategy will set out the governance, operational and financial arrangements which underpin our new ambition for future development and growth, together with our approach to the management of risk that will be realigned to take account of the new development profile.
Sarah Ireland Executive Director of Development & Growth
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CUSTOMERS CAN BUILD A LIFE THANKS TO ACCENT. OUR HOUSES ARE AN ASSET TO THE PEOPLE THAT CALL THEM HOME AND THEIR WIDER COMMUNITY – EQUAL PARTS ATTRACTIVE, SAFE AND AFFORDABLE. 4
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OUR PURPOSE
TO SECURE A FINANCIALLY VIABLE, SUSTAINABLE PIPELINE OF NEW HOMES. OUR MISSION
ACCENT IS A HOUSING ASSOCIATION WORKING TO IMPROVE PEOPLE’S LIVES’ 6
OUR VISION To become an established and well thought of provider of high quality new homes in a variety of tenures which meet our customers’ needs and aspirations. We will build these in sustainable locations where our customers want to live. The headline Accent Group Corporate Strategy sets out the following commitments: • To develop 1,800 new homes by 2024.
• Maintaining a Treasury Strategy that maximises our financial capacity, within our agreed golden rule and covenant parameters.
• Ensuring we build houses that meet the housing needs of the diverse markets in which we work.
• Aligning investment decisions with our pro-active Asset Management Strategy.
• Re-provisioning or re-modelling low performing assets.
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HEADLINE PRINCIPLES BEHIND ACCENT’S DEVELOPMENT AND GROWTH STRATEGY • We will grow the Accent development pipeline sustainably to deliver an annual programme of 500 new affordable homes in areas of need. • We will ensure that we achieve a balance between improving the performance of our existing assets and growing our overall asset base by linking with our Proactive Asset Management Strategy. • We will cross subsidise the delivery of homes for Affordable and Social Rent by maximising our grant funded programmes and by delivering some shared ownership and private development for sale. Always ensuring that these activities do not represent an unacceptable risk to our financial plan. • Revenue generated from shared ownership and private sales will not exceed 20% of the total revenue income on an annual basis. • Development projects must meet the risk appetite and financial parameters and overall financial capacity approved by the Accent Board.
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WHERE WILL WE BUILD OUR NEW HOMES? DEVELOPMENT AREA NORTH Areas where we have homes Focus for development
1. South Ribble 2. Preston 3. Ribble Valley 4. Craven
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5. Harrogate 6. Bradford 7. Leeds 8. Kirklees
We will develop in areas that strengthen and complement the core Accent business. This development strategy is built around the unique distribution of Accent’s housing stock and in areas that have been identified as sustainable for new growth.
DEVELOPMENT AREA EAST Areas where we have homes Focus for development
1. South Northamptonshire 2. Northampton 3. Wellingborough 4. Kettering 5. East Northamptonshire 6. Peterborough 7. South Holland
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8. Fenland 9. Huntingdonshire 10. Bedford 11. Milton Keynes 12. Central Bedfordshire 13. South Cambridgeshire 14. East Cambridgeshire
DEVELOPMENT AREA SOUTH
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1. Hart 2. Rushmoor 3. Surrey Heath
4. Runnymede 5. Woking 6. Waverley
Areas where we have homes
Focus for development
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WE WILL BUILD WELL DESIGNED HOMES IN TENURES WHICH MEET THE HOUSING NEED IN THE LOCALITY
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All new developments will aim to achieve the best possible design standards and efficiency standards providing high quality, safe, secure and affordable homes for our customers that make a positive contribution to the community in which they are built. We will offer choice, quality and value to our customers and: • B uild homes that are affordable to heat.
• R espond to our customers’ needs and aspirations at a local level.
• D emonstrate commercial awareness by delivering quality and value at reasonable cost with a reasonable return on our investment.
• Deliver a range of housing options for mixed income households that are indistinguishable by tenure.
• Consider the lifespan of fixtures and fittings to ensure specifications meet with Accent’s planned replacement programme.
ngage with our customers; design • E teams, contractors and the Customer Experience teams to continually improve the design, specification and construction of our new homes.
new technologies to assist the • Pilot customer experience team’s aspiration to move towards a proactive rather reactive repairs service.
• I nvestigate and evaluate, in a partnership, the use of new construction techniques and modern methods of construction where they allow us to deliver value to the organisation and our customers.
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HOW DO WE BUILD A LAND LED DEVELOPMENT PIPELINE? In order to develop a land led development pipeline Accent will develop excellent working relationships with a range of stakeholders including landowners, land agents, contractors, local authorities and other RPs. • A strategically targeted communications strategy. • A stakeholder review. • Continued evaluation of bidding strategies. • Identifying potential partners who are able to work with us on the development of strategic land to spread risk and share cost. • We will work with members of the Accent Consortium to identify and deliver new opportunities in areas of geographical overlap.
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WE WILL…
BUILD 1,800 NEW HOMES BY 2024 WE ARE
WE ARE
WE ARE
We will access funds and invest prudently to build great homes for our customers
We will develop new homes in partnerships where we can achieve more together
The new homes that we build will make Accent a stronger and more sustainable organisation
DRIVEN
ENERGETIC
WE ARE ACCENT…
SMART
WE ALWAYS DO WHAT WE SAY WE ARE GOING TO DO
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RESOURCES
BUILDING CAPABILITY AND CAPACITY PEOPLE
ACCENT DEVELOPMENT VEHICLE
A recent review and restructure of Accent’s Development and Growth Team ensures the delivery of this strategy.
Accent has had in place for some years an actively trading, VAT and gift aid efficient, independent subsidiary company through which it is intended to manage the majority of the Accent development activity.
Sarah Ireland, Executive Director of Development and Growth, leads the newly formed directorate.
We will develop a brand identity and create a sales brand which inspires people to work with us and for us, and to buy or rent the homes we build.
The Land and Planning team will work to maintain close links with operators associated with the land markets and other key stakeholders to secure new land led development opportunities.
Our brand will be guided by a series of key principles:
A new sales team will be formed to lead and develop the sales function.
• We develop affordable, attractive, good quality homes • We are a fantastic landlord • We are easy to work with • We are here for the long term
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FUNDING • Grant funding from Homes England through the Accent Consortium:
This strategy is underpinned and supported by a robust, fully stress tested Financial Plan and supporting Treasury Strategy.
Accent will fund its development programme by:
– H omes England’s Affordable Housing Programme 2 (AHP2) – The Shared Ownership Affordable Housing Programme (SOAHP)
• Homes England Strategic Partnership WAVE 2 funding through the Together Housing Group consortium
Utilising private borrowing, that is • already in place, both from bank lending and newly issued £350m bond. The cost of which is met by rental income and shared ownership first tranche sales and receipts from staircasing • Surpluses generated from shared ownership and private sales • Recycled Capital Grant Funding (subsidy) • A revolving credit facility
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RISK To mitigate against the following risk areas, we will:
SALES RISK
REPUTATIONAL RISK
• The Sales Director will advise on sales products on a scheme by scheme basis and devise appropriate and bespoke marketing strategies which are continually evaluated.
• C onduct regular programme and contract meetings with all stakeholders.
• Monitor the housing markets in which we work on a monthly basis.
• M anage any financial risk through Accent’s established risk management framework where risks for all schemes are appraised as part of the feasibility process and reported as part of the approval process to the Executive Team/ Capital Investment Team/ Board.
FINANCIAL RISK
• Ensure that Accent is able to access Help to Buy equity loan products for our private sale customers. • The Capital Investment Committee will review a range of key performance indicators and market data to identify early warning triggers which signal a requirement to adjust or change strategic direction. • All approvals will be supported by a sensitivity analysis that clearly demonstrates the impact of a reduction in the Gross Development Value (GDV) and the slowing down of the sales rate and the impact of converting sale units to Rent to Buy units as an exit strategy.
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GOVERNANCE Accent utilise a robust structure to appraise individual scheme performance:
Financial Appraisal in
PROVAL
60 month cashflow updated and monitored monthly
Monitoring through
SEQUEL
Financial Planning of Aggregated Programme in
BRIXX
Individual schemes will be submitted for approval in accordance with the governance structure set out in the Accent Scheme of Delegation.
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MONITORING The Capital Investment Committee will annually review: • governance arrangements to ensure plans are still appropriate for the level of risk being undertaken. • internal audit and Homes England audit report reviews. • the development appraisal parameters. • individual scheme financial out turn reports.
STRATEGIC NON-ORGANIC GROWTH Accent will undertake a Strategic Asset Review to ensure that our core business remains resilient in longevity. This will involve: • identifying poor performing assets that can be redeveloped to enhance performance or disposed of. • a nalysis of the locational stock synergies with other RPs to look at opportunities for stock swaps or other management or acquisition opportunities. • seeking out partnerships with other RPs to enable us to work together and share resources.
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LIKE TO THANK EVERYONE WHO ” I HASWOULD HELPED US REACH THIS POINT, NOT ONLY
IN PREPARATIONS TO ISSUE THE BOND, BUT TO EVERYONE WHO HAS SUPPORTED THE EXECUTIVE TEAM TO DELIVER OUR FUTURE VISION FOR ACCENT. OUR AMBITIOUS DEVELOPMENT PROGRAMME, LOW ARREARS AND OUR COMMITMENT TO DELIVERING A GREAT CUSTOMER EXPERIENCE, HAVE DEMONSTRATED TO OUR INVESTORS WE ARE A BUSINESS WHICH IS OPERATING WELL, AND ONE THAT IS WORTH INVESTING IN.
PAUL DOLAN
CHIEF EXECUTIVE, ACCENT GROUP
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THIS STRATEGY SETS OUT A PLAN THAT WILL DELIVER A FUNDAMENTAL STEP CHANGE IN THE WAY ACCENT DELIVERS ITS AFFORDABLE HOMES PROGRAMME. TRANSITIONING FROM A SMALL LARGELY DEVELOPER DEPENDENT S106 LED PIPELINE, TO A WELL-MANAGED, SIGNIFICANTLY LARGER, FULLY FUNDED, INDEPENDENT LAND LED PROGRAMME.
SARAH IRELAND
EXECUTIVE DIRECTOR OF DEVELOPMENT & GROWTH TEL:
01274 065 398 sarah.ireland@accentgroup.org
EMAIL:
ACCENTGROUP.ORG