Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by Riverside Housing Association (AFH 19)

  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 housing—it 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 occupation—for 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 own.

  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 as £25,000.

  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 housing market.

  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.

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