Starter Homes Rotherham Town Centre Sites Tom Bell Strategic Housing and Investment Manager 5 th April 2016

Background Government commitment to building 200,000 Starter Homes through the course of this parliament. £1.2b Starter Home Land Fund announced in Government Budget to bring forward Starter Homes on vacant, underused or unviable land in non- residential use. Rotherham has ambitious plans to increase housing delivery from less than 600 to 1000 per year to meet the needs of Rotherham’s residents and support ambitious plans for economic growth. RMBC owned sites are available in Rotherham town centre that meet the criteria for Starter Homes.

What is a Starter Home The key government initiative to promote affordable home ownership Available to first time buyers up to 40 years old. Starter Homes, will be built :  On previously under-used commercial or industrial land  On sites not currently assigned for housing Sold at 80% of the market value Property value up to £250,000 outside London Cannot be resold / let at open market value for five years Monthly mortgage repayments could be as little as £430 per month

Benefits of Starter Homes Providing affordable alternative to rapidly growing private rented sector. Enables more young people to own their own home and encourage them to live in Rotherham. Revitalise Rotherham’s town centre. Regenerate derelict and unviable sites. Making best use of Council assets. Support economic growth. NHB & Council Tax income

Dialogue with Government Strategic alignment Visible political support Shared passion and commitment – joined up services Co-investment into Starter Home programme Work with Local Partnerships to develop thinking Alignment with the Sheffield City Region economic growth. Help regenerate town centre

Potential Sites Initial Focus on 3 sites. Potential for over 360 new homes across 3 sites Local Authority owned Derelict/under used assets for many years Potential for a pipeline of sites going forward that meet the criteria set out in Starter Homes Local Authority Fund Prospectus.

Town Centre Sites

Millfold House Location: Sheffield Road, Town Centre Site Area:0.39ha Potential units: 116 units Planning Status: Mixed Use Area, non- residential uses Site attributes: Site in Local Authority ownership. Granted approval to dispose of the site. Decant of existing tenants is underway. Neighbouring land owners have offered their land for sale which presents further opportunities to expand the development site. Key gateway site. Site Issues: Decant existing tenants on short leasehold Demolition of existing buildings Hillside gradient

Concept Design: Millfold House Site

Former Henley’s Garage Location:Wellgate, Town Centre Site Area:0.65 Ha. Potential units: 87 units Planning Status:Mixed Use Area non-residential uses Site attributes: Site in Local Authority ownership. Cleared site. Detailed options analysis completed which included; −Topographical and site survey −Utilities and drainage survey −Review of legal title −Structural survey of retaining wall Central location bordering existing residential community. Key gateway site. Site Issues: Contamination from former petrol station requires a capping layer of clean soil material for gardens and soft landscaped areas that could cost up to £200K.

Concept Design: Former Henley Garage Site

Sheffield Road Car Park Location: Sheffield Road, Town Centre Site Area: 0.68 ha Potential units: 158 units Planning Status: Mixed use area Site attributes: Site in Local Authority ownership. Cleared site. Site part of waterfront regeneration plans. Key gateway site. Site Issues: Flood alleviation Improvements to river wall

Concept Design: Sheffield Road Car Park Site

Development Appraisal Carried out by Rider Levitt Bucknall (RLB) Based on concept designs Local sales values Building cost information service (BCIS) local rates Abnormals based on desk top site investigations

Viability Headlines Site Name Dev’t Value (50% SH) Dev’t Cost Site Abnormals Developer viability gap (20% profit) RMBC viability gap (nil profit) Dwellings Sheffield Road 13.8m19.3m1.6m (15%) -5.5m-2.4m158 Millfold House 10.1m13.5m1.1m (15%) -3.4m-1.4m116 Henleys9.3m10.3m0.7m (10%) -1m 87 Totals33.2m43.1m3.4m-9.9m-4.8m361

Viability Sensitivities Number of Starter Homes Borrowing interest rate Profit Ratio of 1 and 2 bed apartments and town houses Space standards Firming up abnormal costs HCA capital support

Routes to Market Design led Customer centric approach Affordability Developer vs RMBC led delivery RMBC in house vs Housing Company Developer advice Role of HCA as partner

Next Steps Refine intelligence & Modelling Clarify what we want on each site Internal resourcing : A (virtual) dedicated team? Requires both site & area transformation – Waterway Clarify the ask of Gov’t : finance and support Clarifying the council contribution & long term benefits Can we get a go early project? Convince Gov’t. Secure (niche) developer advice Has to be quality – if we are to convince early adopters