Select Committee on Transport, Local Government and the Regions Memoranda


Memorandum by Endeavour Housing Association (EMP 18)

SELECT COMMITTEE EMPTY HOMES

  I am involved in Hartlepool's New Deal for Communities Housing Task Group—I believe NDC has already made a submission based on the work carried out by Nathaniel Lichfield. I am also involved in drafting the "Older Housing Strategy" with Middlesbrough Council. In both areas emerging households are skipping the "first rung in the ladder" pre 1919 terraced housing because they are able, if they are in work, to afford a new semi-detached house with garden, garage, carpets and white goods. Older property prices are flat or falling, vacancy rates increasing and private landlords growing in numbers. It is clear that some progress needs to be made to clear a number of obsolete older houses—we estimate 800 in Hartlepool; over 1,000 in Middlesbrough. Put simply, there are three major difficulties.

1.  Compensation Packages

  Although currently reducing as a proportion, there are still significant numbers of owner-occupiers in these areas. In practical and moral terms it is important to achieve as much acquisition as possible by agreement rather than compulsory purchase. I think the "Homeswap" pilots, and the recent DETR consultation paper "Private Sector Housing Renewal" will help. Negative equity is a key problem and does not only exist where there is a mortgage outstanding. Take two owners in identical circumstances; the first spends his redundancy money making pension arrangements and buys a house with a mortgage, the second buys a house with the redundancy payment and starts saving for his pension. Both suffer an identical fall in value of their property. Restricting negative equity compensation to situations with outstanding mortgages means the second person is not entitled to anything.

2.  Funding

  Research by our consultants indicates that most projects of this nature have only identified firm funding for around 25 per cent of the total costs. In a few areas there is potential land value to be unlocked but that is unlikely to be the case in Hartlepool or Middlesbrough. Hartlepool NDC has identified £20 million—more than for any other strand of work—but we think simply to purchase and demolish 800 properties treating owner occupiers reasonably well, will cost all of that (I can send detailed figures if that would be useful). It is essential however that we have a vision for future uses of the cleared areas and funds to implement that vision.

3.  Asylum Seekers: Home Office Funding

  Private landlords are currently purchasing properties in the area—and converting existing properties—to house asylum seekers through Home Office contracts. It seems likely many of these will be in the very streets residents decide should come down (cheapest properties, most anti-social behaviour, fewest owner-occupiers). We will end up paying considerable commercial compensation to private landlords because the Home Office is funding use of properties in an area DTLR Government Office knows needs an element of clearance. This does not seem to represent joined up Government.

Charlie Hughes

Chief Executive

September 2001


 
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