DEVELOPMENT STRATEGY 2009-2013
1. INTRODUCTION
Teign Housings Corporate Plan has as an objective: “To provide a choice of quality affordable
homes that people want to live in,” and in the last couple of years the company has started to
deliver new homes.
At the Corporate Strategy event in July 2009 the Board set out seven strategic objectives:

Achieve upper quartile operating costs.

Develop a financial strategy to enable the delivery of the proposals contained in this
strategy.

Develop and deliver a new development strategy to provide 500 new homes from 2011
to 2016.

Expand our housing provision by managing other housing stock in the area and
providing for other housing needs groups as identified by the District Council in their
forthcoming Housing Strategy.

Develop and deliver an estate regeneration programme.

Develop a strategy to identify who with and why we want to work in partnership

Engage with customers to enable their input, influence and development of the
operational plan and associated objectives.
This clearly identifies the intention to develop 500 new homes by 2016 and will continue to focus
on a choice of affordable home ownership and rental options to address current housing needs;
aiming to deliver 30% of New Build Home Buy (NBHB) in accordance with the guidance from the
Homes and Communities Agency.
The approach to developing 500 new homes will be delivered in at least two phases – this is
explained more fully in the funding section.
This strategy continues the development approach that has already been delivered focussing on
general needs, largely family homes and also aims to balance development with the other key
strategic objectives by recognising:

The company still has work to do in terms of service delivery and wants development to run
along side this key objective and not become the overall focus of the company

By virtue of its size the company will not suddenly become a big player in development
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
Development expertise is still being developed and we will continue to build up skills and
experience by working in partnership

Development can be risky and therefore should be given careful consideration

Development should maximise impact in improving neighbourhoods and building
communities. This will vary in how it is achieved but should be considered at the very initial
stages of any development project.
Teign Housing still aims to be a good quality provider of affordable housing in Teignbridge and has
been the preferred partner of Teignbridge District Council (TDC) in 2009-10. It is intended to build
further on this relationship with a view to continuing to remain a preferred partner into the future.
The company will continue to look at opportunities to be innovative (e.g. “green” developments)
and building specialised developments (e.g. homes specifically for wheel chair users).
2. HOUSING OVERVIEW
The housing green paper of July 2007 (Homes for the future, more affordable, more sustainable)
describes the challenges currently facing housing. The key challenges are seen as:

More homes to meet growing demand

Well designed and greener homes

More affordable homes to buy and rent
In addition the paper talks of the need to move to building 70,000 affordable homes by 2010-11 of
which 25,000 will be shared ownership and shared equity.
Alongside this the Oxford Economics house prices forecast details house prices in the south west
increasing by in excess of 37% from 2008 to 2012. Whilst this has slowed with the economic
downturn it still leads to people finding the aspiration of home ownership unattainable.
3. HOUSING NEED IN TEIGNBRIDGE
Teign Housing owns and manages over 3600 homes across Teignbridge, an area of 260 square
miles including 98 square miles of Dartmoor National Park and 22 miles of coastline. The
organisations 3648 homes include 1026 units of sheltered accommodation and homes for older
people where an alarm support service is provided, 151 leasehold properties and 27 shared
ownership homes. The remaining 2444 homes are general needs rented accommodation. The
organisation also owns a small portfolio of 13 commercial shop units.
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Teignbridge District Council’s (TDC) draft housing strategy 2010-2015 identified that 77% of the
homes in Teignbridge are owner occupied, 14% are rented from private landlords and 9% are
rented from housing associations (half the national average.)
Over 4,000 households have applied to Teignbridge District Council to help them find affordable
homes.
Affordability is a key issue in Teignbridge. Local house price to income ratios are higher than
across England.
Indicator
Teignbridge England & Wales
Average house price
£197,400
£198,900
Median full time average earnings
£24,500
£25,400
8.0
7.8
(residence based)
House price to full time salary ratio
Source: Economy & Tourism Unit, Exeter City Council
The recently published Homes Truths 2009 for the South West, from the National Housing
Federation, presents an even gloomier picture for Teignbridge showing the gross annual income
needed for a mortgage as £57,718 and an increase in the 5 year waiting list of 29.6%.
TDC’s assessment of the housing market in 2007 indicates that almost 3,700 homes are needed in
Teignbridge over the next five years of which 41% should be affordable. Their draft strategy goes
on to say that of these affordable homes two thirds should be for rent with the rest being of
intermediate tenure i.e. shared ownership, intermediate rent or rent to home buy. 10% of the new
affordable homes need to be located in rural areas.
In the longer term the Regional Spatial Strategy sets a requirement for 15,900 additional homes in
Teignbridge between 2006- and 2026. This includes 2,000 on the south western edge of Exeter
and 8,000 at Newton Abbot.
The key demand area for households is Dawlish, Newton Abbot and Teignmouth.
Right to Buy (RTB)
Whilst Teign Housing has not had a high level of RTB there has still been a level of reduction in the
general need housing stock. The total number of RTBs to date is 74 with 6 shared ownership
properties stair casing to 100%.
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Right to Buy sales since transfer:
Year
2004-5
2005-6
2006-7
2007-8
2008-9
Total
RTB sales
38
11
13
5
7
74
SO sales
0
1
1
3
1
6
Total disposals
38
12
14
8
8
80
There have been no sales in 2009-10 so far.
Whilst part of the drive to develop will be to replace the stock sold, this has declined dramatically
therefore the greater focus is on providing housing to reduce the housing waiting list.
4. COMPETITION
TDC identify a number of other housing organisations developing in the Teignbridge area:
Affordable housing deliveries 2005-2010
Organisation
Number of Units
Westcountry Housing Association
28
Hastoe Housing Association
4
Devon Community Housing Society
6
Devon & Cornwall Housing
6
Teign Housing
45
Tor Homes
28
Sovereign Housing Association
76
Affinity Sutton
53
Cornerstone Housing Association
15
Signpost
4
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Anticipated housing deliveries 2010-2012
Organisation
Number of Units
Westcountry Housing Association
34
Hastoe Housing Association
40
Devon & Cornwall Housing
51
Teign Housing
66
Tor Homes
29
Sanctuary Housing
56
Note: These numbers may be subject to change as sites progress.
In the last 18 months Teign Housing has built a good relationship with TDC with us developing new
homes on adjoining land that will be transferred from the council for little or very low values. We
have achieved preferred partner status in this current year and aim to retain this and build on the
relationship for the future. We need to continue to maintain a good track record in delivery and
developing a strong relationship with council officers not only in terms of development and planning
but also in housing management and homelessness (there has already been significant progress
on this.)
5. DEVELOPMENT PRIORITIES
The Board have clarified the focus for the development of new homes and the associated services
that are required with this. Therefore the key development areas would be:
1. General Needs new build – this would be general needs stock either developed using land
opportunities that become available or purchased from speculative house builders who are obliged
to provide affordable housing as a condition when securing planning approvals (through the use of
Section 106 Planning Agreements). Whilst the mix on these sites has become more limited
recently it would still be appropriate to aspire to mixed tenure developments including shared
ownership and open market sale. These opportunities should become available again as the
current financial crisis improves.
New Build Home Buy (shared ownership or shared equity schemes) will be a key part of traditional
development, not only because of the income they generate to subsidise the total scheme costs
but also to allow an opportunity of affordable home ownership which is unlikely to be otherwise
available. There is a specific financial risk associated with shared ownership which is covered in
the risk section.
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Whilst the strategy is to deliver 500 new homes the sole aim of the development strategy is not
quantity there is a clear desire to build quality homes focussed on delivering the needs of the local
community.
i.
Green/brown field sites – these would be the ideal sites and may arise through approaches
by developers or agents, section 106 agreements or as rural exception sites. Any of these
opportunities would be considered and reviewed as along as they fit with the key strategic
objective.
ii.
Re-profiling of existing stock – Teign Housing has some stock that is no longer fit for
purpose, in addition it has some garage sites that are not used and are in poor condition.
When looking at the existing stock various options can be considered including demolition
and building a different profile of stock on the land, specialised build, re-profiling for a
change of use (from sheltered to general needs), disposal or continuing with the same use.
This will tie in closely with Housing with Support and the Asset Management strategies.
Teign Housing has also identified a significant level of under occupation of its family homes;
we have successfully used new development to free up some of these under occupied
homes and will continue with this.
iii.
Identification of land availability with TDC – we have developed a number of sites using
TDC adjacent land. TDC have been keen to support this and whilst it does not give rise to
large scale development it does allow small numbers of units to be developed (usually
rented homes) around the district. It has also allowed for some fully adapted properties to
be developed to address some specific family needs.
2. Gypsy and travellers – The South West Regional Assembly (SWRA) is working with local
authorities across the South West region to identify the number of pitches required for Gypsies and
Travellers in their area. Local authorities, under the provisions of the Housing Act 2004 are
required to consult with and consider the accommodation needs of gypsies and travellers in their
area. The SWRA has run a public consultation exercise on the number of pitches required across
the South West. The requirement for TDC is an additional 65 pitches plus 5 transit pitches. We are
already working with TDC on site identification and initially aim to provide two new sites through
funding provided by Homes and Communities Agency. Whilst this does not fit with the key
objective of general needs homes it is a key issue within the district and the Board have accepted
that this is only likely to be delivered by an RSL. The aim is to provide sites by 2011.
3. Housing with Support – the Housing with Support strategy looks at increasing the range of
support that Teign Housing currently provides and re-profiling some of the existing sheltered
housing stock. The Board are quite clear that there is no intention to become a specialist provider
but as part of its community role Teign Housing would consider developing the accommodation, for
specialist support provision, providing that the support was available and funded from an external
agency.
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4. Adhoc – there may also be opportunities for development arising in other markets such as key
worker, student accommodation, rented accommodation for young people (16-25 age groups),
market rent, open market sale, acquisition of new homes from developers and Community Land
Trusts. Any opportunities in these areas would be considered on an individual basis, assuming that
they met the key strategic objective, that any support was provided by an external agency (again
Teign Housing would provide accommodation only) and following a full options appraisal.
5. Land banking – this is not an area that has been considered by the Board however it is felt that
creating a land banking sub strategy, for Board approval may be developed in the future if
opportunities arise.
It is anticipated that the majority of this development would be within the Teignbridge area taking
into consideration the different demands of the three key centres and the rural areas. However
should other opportunities arise outside of Teignbridge these will be considered giving
consideration to distance and fit within the existing maintenance and housing management
arrangements. Therefore the TDC boundary will no longer be a fixed area of potential development
activity.
6. FINANCE
The current development programme utilises much of the remaining capacity within the existing
loan facility of £47m. Therefore to deliver the new development aspiration of 500 homes additional
funding will be required.
Whilst it would be possible to look for new funding to provide the additional 500 homes, this would
equate to approx £30m. In the current climate this would not only be ambitious, as the funders are
being more cautious, but it could also be very expensive.
Therefore there are a number of reasons why a staged approach to securing additional funding is
preferred:

Initial discussions with Barclays have indicated that they are comfortable with lending an
additional £10m to increase our development delivery. This will allow for approx 150 new
homes as the next stage in the development programme.

Barclays have indicated that they are currently looking at additional lending over a 3 year
period. Delivery of 150 additional homes over 3 years is a realistic target whilst delivery of
500 homes would be ambitious. Not using the increased funding will potentially give rise to
non utilisation costs which may be a significant burden to the company, a risk we would
want to minimise.

Grant funding for new homes is likely to fall as a result of the pressure to reduce public
spending and the aim would be to secure as much grant as possible in the short term.
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However more than 150 homes in the next 1-2 years would be unrealistic. During this time
any potential changes to grant levels may be quantified and the impact on the strategic
objective of 500 homes can then be evaluated.

Private sector build and sales has been very limited in the last 18 months and this impacts
on the willingness of developers to build. This has also impacted on the number of section
106 agreements for affordable housing coming forward. As the housing market begins to
recover we can evaluate the appetite from developers and the opportunities for new
affordable housing.
Funding
The following funding sources will be used to fund the development projects:

Social Housing Grant (SHG) – the company will bid competitively within the New Futures
group to secure SHG.

Loan finance – the requirement for additional loan funding has already been detailed

Other public subsidy – provided by TDC, other Local Authorities or other public body grants

Internal subsidy – this can be derived from disposal of units or land sales and will be
retained in a specific development reserve. In addition there may be subsidy from other
entrepreneurial activities of the company.
We will take every opportunity to release additional capacity within the Business Plan which can
then be utilised for both development and regeneration activities.
Financial Business Plan
Our current Business Plan allows for the current development programme and has a peak debt of
£44.1m in year 2 (2010-11) and repays in year 25. This was approved by the Board in March
2009.
This plan is currently being reworked to include an additional £10m of funding for additional
development and will take into account all of the other known changes (such as rent reduction)
which the company needs to address.
Once this has been completed and Barclays have offered pricing for the additional funding a new
Business Plan will be finalised and brought to the Board for approval along with the proposed
funding arrangements being offered.
There will continue to be a focus on achieving Value for Money, through working closely with
partners, ensuring efficient processes are undertaken, looking at opportunities for supply chain
management, consideration of modern methods of construction and an open book approach to
delivery.
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7. SUSTAINABLE DESIGN AND DEVELOPMENT
Development is about providing good quality homes as well as maximising the number. Teign
Housing will aim to continuously improve development whilst ensuring efficiency, quality and value
for money. The company will also seek to be innovative in design, procurement and construction.

Sustainability will be in line with the Sustainability Policy and every new build development
will assess its achievement of the targets as part of the appraisal process.

As a minimum we will deliver the Code for Sustainable Homes requirement needed to
secure grant funding. However we will also aspire to deliver a higher code level on some
specific sites where there are enhanced benefits and the costs are not prohibitive.

New build design will increase space standards and increase the flexibility and quality of
the stock including criteria such as Scheme Development Standards, Secure by Design
and Lifetime Homes.

Construction Commitments 2012 (CC2012) – we have committed to meeting the CC2012
requirements and these will influence our approach to development.
8. PARTNERSHIPS
Partnerships have proven to be a successful delivery mechanism for Teign Housing and
development aims to build further on the partnering approach.
The development agreement with Aster is based on a partnering approach; the term of the
agreement lasts until March 2011.
Given the anticipated scale of development it is not financially viable to have an in house
development team. Therefore it is felt that the partnership with Aster and being within the New
Futures group of organisations will allow Teign Housing to build its development knowledge and
skills and share ideas and good practice with other members of the group, whilst also gaining
access to grant.
There is also a desire to build on the good working relationships that Teign Housing currently has
with partners:

Millwood Homes (Devon) Limited lease the office accommodation to Teign Housing with
the office being developed in consultation with the company. They have developed the
Drake Road site with Sarsen whilst Teign Housing was in supervision and they are building
the development at Carswells, Kingskerswell.
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
Smaller scale developments are now being delivered by Coyde Construction and this is
also proving to be a good delivery partnership.
We will continue to build on these partnerships and seek out and develop others as the programme
develops.
The company also recognises that building on going relationships with local contractors will help
sustain the local economy and therefore the local community. This sits well with the aim to be an
excellent local housing provider in its wider context.
With the exception of the current Aster agreement these partnerships would not be exclusive thus
allowing Teign Housing to work with different contractors as the opportunities arise.
In addition to these partnerships, development will progress the relationship with the Homes and
Communities Agency (HCA) ,as grant provider, and the Tenants Services Authority (TSA), as
regulator. As we are now in receipt of grant, as part of New Futures, the TSA will be considering
the risks and exposure of Teign Housing as a developer, so it is imperative that development is
handled well and that we continue to foster a good relationship with the regulator.
9. RISK
Risk
There are numerous risks associated with development some of which are planning (including
Dartmoor National Park), land availability, cost, capacity, grant funding, capital receipts,
competition, design issues and slippage. These will be considered on an individual basis as each
scheme evolves.
At a strategic level the key risks will be:

Ensuring that the right type of housing is being developed to meet demand

The company can afford its development activities and achieve any grant aspirations

Development becomes the sole focus of the company

Developments no longer pay back within the business plan timescale of 30 years.

Private sector capacity to build

Failure to meet the HCA requirements
There is a specific financial risk with NBHB development. The receipts from NBHB can subsidise a
development both from the initial capital receipts and the ongoing stair casing assumed by
development appraisals and within the business plan. Given the current housing market and the
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forecast for the future both the initial sale and the element of stair casing is now more uncertain
and therefore brings an increased financial risk.
It is proposed that there is close monitoring of NBHB developments to ensure the company does
not over commit itself in this area and the experience of each tranche of NBHB sales are used to
inform future developments.
Withdrawing from NBHB would seem to be short sighted given the demands in the area and the
continuing lack of affordable homes for ownership. However the risk does need ongoing careful
evaluation.
9. APPROVAL
The Standing Orders now include the Terms of Reference for the Development Panel and provides
clarification on the delegated approvals and those that remain with the Board. This is further
detailed by the Development Appraisal Policy which also provides further guidance on the
delegation between the Development Panel and the Board.
The Development Panel meets quarterly and will approve and monitor development within its
delegated powers.
10. MONITORING
The Development Panel will meet quarterly and monitor and review all aspects of development,
including approving projects within its delegated authority. The Chair of the Development Panel will
report back to the Board in the usual way for a Board sub committee.
Update Development reports will be provided to the Board, for information, on a biannual basis.
11. CONCLUSION
This strategy will allow Teign Housing to move forward with development for the next couple of
years. It will allow the company to increase its stock both through new build and maximising the
opportunities within its existing stock holding. It will aim to address some of the housing need that
is still a serious concern within the district. We will continually look for opportunities and there are
already some very early stage pipeline opportunities. New funding arrangements will be brought
before the Board for evaluation and consideration whilst the development schemes will be
progressed through the Development Panel when/if they develop into more substantial
opportunities.
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This strategy will need to be dynamic and we will keep it under review with the Development
Panel. As part of this we will need to consider :

The development experiences of Teign Housing

The availability and level of grant

The availability and cost of funding

The success of this strategy

The partner arrangement with Aster

External influences such as a change in central government

The ongoing relationship with TDC

Opportunities for innovation around tenure, environmental issues and community
development based on experiences so far

Change in the housing market and housing need
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