Direct Delivery: Leeds City Council

What went in

Budget and timeframes

• Healey Gardens: HRA borrowing & RTB grant funding – construction contract c. 10 months August 2021 to June 2022.
• Hough Top: HRA borrowing, RTB grand funding and Brownfield Housing Fund – 99 week programme December 2024 to November 2026.

As a council, we are taking a proactive and direct approach and building at scale for the first time in decades - 1,200 over five years through our Housing Revenue Account, utilising our ability to borrow and drawing on the receipts we get from the Right to Buy.  We use our own brownfield land that has become available through asset rationalisation and closure of operational facilities. 

This case study highlights two such sites and how Leeds City Council’s direct delivery of new build 100 per cent affordable schemes at Healey Gardens and Hough Top are helping to meet our housing need as well as contributing to wider Council ambitions. It outlines the context, site specifics, outcomes and challenges faced

In the last five years Leeds has delivered almost 17,000 new homes, equivalent to c1.5 per cent of England’s housing supply. Within this same period, Leeds has built more new affordable homes than any other city outside of London, with a greater proportion of social rented homes than the national average (36 per cent compared with 12.4 per cent nationally). Despite this, the total number of applicants on the Leeds Homes Register continues to grow. At the end of Q2 2024/25 there were 28,677 applicants on the register, 19 per cent were in urgent housing need (Band A & A+). Last year around 6,400 households approached us for advice and support to help prevent them to become homeless, which is increasing year-on-year. 

The Council’s recently updated assessment of housing need (through the Strategic Housing Market Assessment – SHMA) has increased to 2,136 new affordable homes required each year (74 per cent increase since the 2017 SHMA). This figure represents a considerable increase and reflects the pressure on housing resulting from the cost-of-living crisis and the increased cost of private renting.

There is a need to develop good quality, sustainable, affordable housing across the city and the Council Housing Growth Programme (CHGP) is contributing to the Leeds Affordable Housing Growth Partnership Action Plan 2022-25, which sets out an affordable housing pipeline that targets delivery of c.750 new affordable homes over this period.

Healey Gardens 

Healey Croft, now named Healey Gardens, is a new build Council housing development, located in Tingley. This 100 per cent affordable housing scheme was built on a former brownfield site by Willmott Dixon Construction Ltd on behalf of Leeds City Council. The development features nine new modern and fully insulated homes, including: five two-bed; three three-bed and one six-bed properties. These affordable M4(2) council properties have contributed towards addressing significant local housing need, whilst also ensuring that people can live in warm and fully insulated homes which can help to reduce fuel poverty. The scheme was managed by the Council Housing Growth Team (CHGT) programme via Scape, Public Sector Procurement Framework - Partnership working has been key to delivering within budget whilst meeting the requirements of various stakeholders. All properties were made available to applicants on the Leeds Housing Register for affordable rent. 

From the outset, Healey Gardens was envisaged to be an exemplar of social and environmental sustainability. Supporting aging in place and a known need for homes for persons with additional needs, all houses comply with optional M4(2) accessible housing standards of the Building Regulations. Site selection next to Amblers Orchard Extra Care offers social opportunities for residents to socialise with neighbours and nearby community facilities make Healey Gardens part of a 20 minute, truly walkable, neighbourhood. 

This site also offered a rare opportunity for affordable housing located adjacent to the green belt, providing an attractive site boundary and landscaped setting to south and west. The layout allows direct access to green space to the south of the site and further off-highway walking routes to the south and around Ardsley reservoir. 

Together with very high fabric thermal efficiency, solar voltaic panels, ground source heat pumps and electric vehicle charging points all contribute to homes which are not only efficient and affordable to heat today, but also future proofed for tomorrow. 

From inception, the scheme has perfectly blended the needs of both residents and the environment not only now, but across the full project lifecycle.

Hough Top

Hough Top in Pudsey is an on-going development of 88 100 per cent affordable housing scheme on the 2.5ha former school site at Hough Top in Swinnow. These affordable M4(1), M4(2) and M4(3) council properties will contribute towards addressing significant local housing need, whilst also ensuring that people can live in warm and fully insulated homes as the specification of the scheme focuses on cutting carbon by using air source heat pumps in each property as well as ensuring the properties are constructed using high insulation levels. 

Demand data from the Leeds Housing Register shows there is demand for a wide range of different house types across the Pudsey ward, which is reflected in the varied property mix agreed for the new development. The site will deliver 82 general needs accommodation consisting of 17nr 1nr bed apartments (two of which are M4(3)) and 10nr two bed apartments in a three storey block, 28nr two bed houses, 23nr three bed houses and 4nr four bed houses.

The scheme is being managed by the Council Housing Growth Team (CHGT) programme via Scape, Public Sector Procurement Framework. This 100 per cent affordable housing scheme is being built on a former brownfield site by Willmott Dixon Construction Ltd on behalf of Leeds City Council. There are limited opportunities to develop Council housing in the outer west area of the City, with no other sites currently proposed within the CHGP for new build Council housing in the Pudsey Ward. On completion all properties will be made available on the Leeds Housing Register for Affordable Rent.

Challenges

Brownfield sites often come with significant costly remediation requirements. Leeds has a strong track record working with partners at the West Yorkshire Combined Authority (WYCA) to access Brownfield Housing Fund. £1.64 million of grant was secured for Hough Top to help meet the abnormal costs and scheme viability. This grant funding is very welcome but does not cover the full cost of site remediation which were assessed as being £3.22 million. 

As well the impact of remediation costs on viability, construction costs have increased significantly over the last three to four years which has impacted borrowing costs and scheme viability. In August 2022, interest rates on borrowing for housing growth was in the region of 1.72 per cent but has since increased to 4.75 per cent and is predicted to go higher. The impact is that borrowing costs on £1 million spend have increased by around £600,000 over that period. On a capital programme of around £200 million if half is met by Right to Buy receipts then the borrowing element would be almost £60 million more than two to three years ago. 

The impact of high borrowing rates and construction costs means that even with a current subsidy rate of 50 per cent of scheme funding through RtB receipts, schemes at 80 per cent of market 'affordable' rents are barely viable over a 40-year period. An increased subsidy rate of almost 75-80 per cent of scheme costs would now be needed to be able to deliver viable social rented housing at approximately 50 per cent of market rents. 

As a result of the remediation costs, construction costs and impact of borrowing and interest rates, Healey Gardens was deemed viable where rents are 70 per cent affordable market rent. Hough Top however will be marketed at 80 per cent of affordable rent. 

Leeds declared a climate emergency in 2019 and set an ambition to make the city carbon neutral by 2030. Housing accounted for 27 per cent of CO2 emissions in Leeds in 2019. These new energy efficient homes, play an important role in supporting the city’s carbon zero ambitions and influencing other housing providers operating in the city to reach the same standards and to a non-gas solution which provides cleaner energy.

Not only do these schemes contribute much needed highly energy efficient affordable housing, they strongly align with the three pillars, which are at the centre of the Leeds Best City Ambition, as follows: 

• Supporting communities and tackling fuel poverty, improving housing quality and standards.
• Promoting sustainable and inclusive economic growth.

• Reducing carbon through the improved insulation of the Council’s housing stock.

There are wider outcomes of these sites; Hough Top for example is contributing to delivering against the Council’s social value charter aspirations via the creation of employment, skills and apprenticeship opportunities within the city. Healey Gardens created 8 local jobs and supported 2 apprentices. 

Tenant satisfaction surveys were completed for Healey Gardens with high satisfaction rates. The outcome of the lessons learnt review resulted in a change to the inspections process to help streamline requirements, whilst ensuring quality items were suitably addressed. The process for coordinating major adaptations has also been reviewed and further updated. 

Despite Healey Gardens being a logistically tight site, with various construction works ongoing in the area at the time of development, the project team did not receive any formal complaints during construction. Communication was important and newsletters were issued to the community during construction, with regular updates also shared with neighbouring organisations. 

Healey Gardens was the first no-gas Council Housing Growth scheme to be delivered. We were keen to ensure the end-user received sufficient information on the renewable energy system. The project team arranged heat pump training for Council colleagues prior to the scheme handing over. In addition, a home user guide, produced by the Council with support from the contractor, as well as tailored online video guidance, was issued to residents prior to scheme completion.  The guidance covered a range of details about the property, including aspects such as effective use of the heating system. On reflection, having increased information on how the heat pump solution would impact residents’ energy bills would have been useful. This is something we are working to cover for future Council Housing Growth schemes including Hough Top.

What is next for Leeds’s direct delivery programme? 

This case study highlights just two examples of the projects Leeds City Council is delivering through its direct delivery programme to deliver a mixture of different types and sizes of properties for those applicants on our Housing Register. There are another 235 properties across four sites under construction. Leeds also has a strong acquisition programme and is looking to acquire 60 properties though Right of First Refusal in 2024/25. The council is also working closely with partners to face on to other funded programmes as they become available. Leeds is working with Homes England to deliver 25 properties via SHAP (Single Homeless Accommodation programme). 

Authors: Amy Myers and Lorna Hebden

Contact: Adam Brannen, Head of Regeneration, [email protected]