Memorandum by Riverside Housing Association
Riverside Housing Association operates in Merseyside,
the North West and the Midlands. We own and manage some 24,000
properties, including over 1,200 units of supported housing for
some of the most vulnerable people in our communities. Our properties
include small refurbished terraced houses in inner urban areas,
modern new build family homes, and sheltered housing for the elderly.
We have few large estates: most of our stock is in local neighbourhood
areas where we are often the major landlord. We have invested
in these neighbourhoods for over 30 years, and many of our tenants
have grown up and grown older in our accommodation. We provide
and manage affordable housingit has been the reason for
our existence. Our main concern now is not so much the supply
of available affordable housing but the quality of that accommodation,
both in our own stock and in the neighbourhoods where we work.
Our vision is to be a leading regeneration agency
delivering quality homes and thriving communities. This means
an active involvement in neighbourhood regeneration and Housing
Market Renewal work. You will already be aware of the impact that
empty homes have on our neighbourhoods, and stock quality is the
other major problem affecting our work.
1. Affordable housing in the neighbourhoods
where Riverside operates is often poor quality housing. It is
not enough to suggest that because there is an oversupply of homes
in some areas that there is no need for additional affordable
housing. We need affordable housing to be decent housing.
2. Affordable housing is often owner occupied
housing in the neighbourhoods where we work because of low property
values. Much more needs to be done to address the awareness of
the hidden costs of owner occupationfor example, repairs
and insurance costs. The Government should consider a decent homes
standard for the private sector as well as the public sector.
3. Replacing poor quality affordable accommodation
under the Housing Market Renewal proposals is essential, and must
be well managed at both local and sub-regional level, in order
to ensure that the necessary arrangements are made for the inclusion
of private developers. This can only be achieved through clear
management of policies and targets, and the provision of incentives
for developers. Government at all levels should recognise the
costs of site assembly in local areas.
Fifty per cent of Riverside stock is Victorian
terraced properties. In areas of high demand this property can
be popular and well worth the high cost of refurbishment. But
in the inner city market areas where Riverside operates, this
accommodation will often cost much more than its value to refurbish
and ultimately may still be unpopular accommodation simply because
of its location. Our typical cost for a full programme of major
repair to a void property is £30,000 but the value of this
property might itself be no more than £30,000.
Seven thousand of our Victorian properties are
two or three bedroom small terraces, and we have another 3,000
flats in converted houses. Small terraces make for very dense
accommodation, with no private car parking and little private
space. This is not the quality of accommodation which people expect
to see in the 21st century. Over 90 per cent of our housing stock
is in Council Tax band A.
Eighty per cent of Riverside properties currently
meet the Decent Homes standard, though we identified 50 per cent
as needing renovation work last year. We are confident that we
will meet the standard in full within the given time limits, with
the exception of the 10 per cent of our stock which is located
in proposed clearance areas. However, those properties alongside
which our properties sit in the neighbourhoods where we work would
not meet those standards if they were social housing. Most are
owned by low-income owner occupiers or private landlords.
The English Homes Condition Survey 1996 shows
that 13 per cent of all properties were considered to be housing
in poor condition in the North West, our main area of operation.
The North West Regional Housing statement 2001 shows that 12 per
cent of the region's private sector housing is unfit. Our own
figures show a need to spend £40 million over the next five
years in order to achieve a decent quality of accommodation, which
is an average of £4,000 a year for each property we currently
A decent homes standard should be put in place
for private sector homes.
Valuations of Riverside Housing stock have shown
that the average value of our stock is less than £35,000.
On our refurbished properties the value can typically be as low
We would charge a typical rent of £200
a month for a three bedroom refurbished property at present in
an inner city neighbourhood. Local owner occupiers, who tend to
have low housing costs because of their length of occupation or
the current low costs of mortgages, will often be paying less
for a mortgage than we charge for rent. However, private landlords
do not always charge such low rents, and we often find that private
rents are as high as £400 a month on properties for which
we would typically charge £200 a month.
Given the low costs of mortgages, those people
who have a steady income will tend to buy rather than rent, forgetting
that within our monthly costs are included repairs and home insurance.
Such is the image of owner occupation that people will continue
to aspire to home ownership rather than renting. And in the long
term this leads to increasing disrepair within the broader affordable
If 25 per cent is the current accepted definition
of how much disposable income is typically put into housing costs
(as in DTLR: Delivering affordable housing through planning policy,
March 2002) then housing costs of £200 a month implies a
regular monthly income of £800. Typically new Riverside tenants
who are working do have earned incomes of £800 a month so
our rents do fall just within an accepted affordability definition.
But only just, because Housing Association tenants tend not to
be in steady employment, and generally work part-time rather than
full-time. And if Associations cannot supply good quality, affordable
housing in inner city neighbourhoods then there is little chance
that it will be available anywhere else.
The current cost of social housing is affordable
to low income families, but the costs of owner occupation may
not be affordable and this leads to disrepair.
To increase the supply of good quality affordable
housing in the inner city housing markets where we work requires
concentrated effort and support by both central and local government.
Housing Market Renewal has shown the need to demolish and replace
around 18,000 old properties in Merseyside, a significant minority
of which are Housing Association homes. These need to be replaced
in lower volume, lower density developments, with accommodation
designed to meet contemporary aspirations. The problems and risks
associated with this must not be underestimated.
First, the site must be assembled. This requires
existing accommodation to be held empty while sufficient properties
are made available to demolish and clear. This implies loss of
income to landlords, demolition costs, maybe even compulsory purchase
cost where non-social landlords can hold a scheme to ransom. There
can be no private developers in the land able and willing to take
these risks, and the cost of holding properties empty has a significant
impact on our business.
Second, the development costs will necessarily
be high on recent cleared sites with a whole infrastructure to
be replaced. Such underlying costs do not lead to the development
of low cost housing.
Third, people will continue to aspire to owner
occupation rather than rented housing. It is important that mixed
tenure schemes are developed to replace the mixed communities
that need to be cleared. This work cannot be successful without
the active involvement of private developers. And they are likely
to need subsidy in one form or another and active encouragement
by local Government Offices as well as the Local Authorities.
Current pressure by Government on the European Commission to approve
an alternative to Gap funding must be pursued.
Finally, it is essential that we continue to
develop new high quality properties for rent. Infill developments,
and those that form part of new private developments will continue
to be needed in addition to the replacement work required by Housing
Market Renewal. The Approved Development Programme (ADP) will
continue to be an important part of our work in meeting housing
needs across the areas of the North where we work.
It must be acknowledged that funds (including
Housing Corporation ADP funds) are needed to support new affordable
social housing which replaces those of our homes which will be
demolished over the next 10 years.
The problem of affordable housing in the North
West and in the inner city neighbourhoods where Riverside works,
is primarily a problem of quality rather than supply. It is essential
that funding packages and active partnership between Housing Associations,
Local Authorities and central government at sub-regional level
should work in order to address these problems.