Memorandum by The Housing Foundation (EMP
The Housing Foundation is a private company
committed to the provision of affordable housing. Since 1996 we
have invested over £50 million to this end.
We have specialised in the purchase, refurbishment
and lease back to Housing Associations. Of particular note were
the purchase and refurbishment of 50 ex MOD homes from Annington
Homes who purchased the MOD estate in 1997 and the purchase of
over 50 empty, boarded up homes in Keyham, Plymouth. These were
entirely renovated and leased back to Sovereign Housing Association
using entirely private finance. PFI without the heartache.
Despite the enormous publicity which our efforts
engendered, we have been unable to undertake any further schemes.
I enclose an article from "Inside Housing", which was
prepared by myself and Ashley Horsey who is Chief Executive of
The Empty Homes Agency, which perhaps best illustrates the problems
we have experienced.
Keyham, at Plymouth undoubtedly demonstrated
how empty homes have a marked deleterious effect on an area. Our
efforts turned an area which had become vermin infected and impossible
to let, into one which has rekindled its community and has become
a desirable location in which to live, becoming first choice for
many prospective tenants on Plymouth City's housing register.
The benefits to the community are obvious for all to see.
There are some interesting lessons to be learnt
from our experiences.
1. Housing Associations must be prepared
to accept the intervention of private sector companies who can
provide the necessary financial package without the implications
of so called partnerships, which are, in reality, simply construction
companies offering a construction service backed by H.A.G. funding.
There is a marked reticence from most Housing Associations to
be sufficiently innovative where schemes can be funded from outside
resources. The Housing Association movement can fulfil its role
of providing homes and providing the management and care without
the necessity of ownership, which seems difficult to convince
them of. The conception appears to be that if private sector funding
is encouraged, it will mean that less H.A.G. will be made available
by central Government.
The full details of the transactions can be
available to the inquiry if it is required.
2. The success of our initiative was very
much assisted by the willingness of Plymouth City Council to use
the existing legislation in regard to compulsory purchase and
by them employing a member of staff, paid for by us, to identify
properties and to identify the owners. Without this member of
staff, problems regarding confidential Council records would have
3. Funding sources were willing to acquire
individual houses and to provide finance for renovation on a house
by house basis, which is normally very difficult to achieve.
There is no doubt that many more of these schemes
could be undertaken with willing Housing Association partners
or, if permitted, by Local Authorities taking responsibility for
leasesparticularly that at the end of the 25 year lease
period the houses revert to the Housing Association at nil cost
to the Housing Association or the Exchequer.
There is no doubt in my mind that Councils should
be able to charge full Council Tax on properties left empty for
longer than 12 months. We endeavoured to assess a pattern of reasons
for properties being left empty and this has only served to confuse
us, but clearly with little financial penalty, owners seem content
to await market trends before taking action on their property.
The problem is then exacerbated because homes next to seemingly
abandoned property are unsaleableand so on. Existing compulsory
purchase powers are probably sufficient, although they could be
strengthened. Many Councils are unwilling to take the necessary
action and it takes very few empty and uncared for properties
for an area to rapidly deteriorate.
An empty homes register is imperative and the
numbers of such properties should be reflected in the local plan
in assessing the release of land for new homes. It seems illogical
to build new homes when there are properties empty and abandoned
The Housing Foundation is becoming recognised
as a leading provider of affordable homes, which are offered on
a joint ownership basis. We sell homes at about 60 per cent of
realistic market value and charge just 2.5 per cent of the value
of our share of the home as rent. The net result of this is that
homes can be purchased by key workers and local youngsters in
good local employment at about 70 per cent of the cost of renting
in the private sector. We also ensure the following:
(1) The unpurchased share is secured within
the lease and held in perpetuity in order to ensure that the homes
remain affordable for all time.
(2) Rental levels can only be increased by
the rate of inflation.
(3) Buildings insurance is provided by the
(4) The lease contains restrictions to protect
the environment of the purchasers and covers such items as unruly
dogs, unlicensed vehicles, unneighbourly behaviour, cyclical decoration
(5) The Housing Foundation also provides
a guarantee against negative equity through insurance, which enables
us to ensure that mortgage companies do not need access to the
retained share which could erode the housing stock.
There is of course no reason why empty properties
could not be treated in the same way.
Having had three children go through University,
living in rented student accommodation, almost invariably of a
totally unacceptable standard, I would welcome a register of approved
landlords if it were properly policed on a regular basis and a
system of addressing complaints provided.
I firmly believe that there has been a too readily
accepted proliferation of Housing Associations involving themselves
in market rented schemes which rarely address empty property.
The enormous bureaucratic costs of their operations make it impossible
to achieve affordability in most cases. We are intending to provide
1,000 homes in the South and South West with no more than six
members of stafftherein lies the difference I believe.
I would welcome Housing Associations restricting
their activities to those for which they were originally instituted,
namely the provision of good quality homes for rent for those
who have no alternative. I was a founder Chairman of an LSVT and
as such have seen at first hand plenty of evidence to support
my, I suspect, unpopular views.
I get the distinct impression that there is
sufficient legislation to cure most of the ills, but many Councils,
particularly with regard to the provisions of PPG3, just do not
seek to enforce them.
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