Memorandum by Blackpool Council (SRH 46)
1. INTRODUCTION
AND BACKGROUND
1.1 Blackpool, the UK's largest and most
important coastal resort, welcomes the opportunity to present
evidence to the Committee's inquiry into rented housing. Along
with regeneration of our economy, housing renewal in Blackpool
is a core priority for local stakeholders. It is our belief that
this memorandum will provide a valuable insight to the unique
dynamics at play in our town's rented housing sector.
1.2 Over the last three decades the economy
of Blackpool has been subject to serious decline. This reversal
in economic fortunes has produced a series of highly specific,
interrelated problems, including a very particular form of imbalance
and failure in the existing housing stock. To date, existing government
policy has paid insufficient attention to these particular challenges,
and the specific interventions required to reverse worsening trends.
[128]
1.3 In January 2006 Blackpool Council commissioned
an unprecedented study into the town's housing market to inform
the development of a robust housing strategy. This study was undertaken
in conjunction with adjacent local authorities, English Partnerships
(EP), the Housing Corporation (HC), and principal Registered Social
Landlords (RSLs). The research has delivered a full Housing Market
Assessment for the natural housing market area (Blackpool and
Fylde), and is helping frame a strategy for intervention based
on likely future socio-economic scenarios. This strategy has is
being developed with local and regional actors, and the Council
is now preparing the ground for intervention in the housing market
in order to address existing market failures, support economic
growth and create balanced, mixed communities.
2. BLACKPOOL:
HOUSING MARKET
FAILURE AND
A STRATEGY
FOR INTERVENTION
2.1 Blackpool's strategic housing study
included the following key findings:
— The areas of most severe socio-economic
deprivation are also the areas that contain the worst housing
stock.
— In the most deprived inner wards
the private rented sector accounts for an incredible 47% of total
stock. Most of this private rented stock is very poor quality.
— Houses in Multiple Occupation (HMOs)
are a severe problem—approximately 3,400 units in inner
Blackpool—and this is closely related to extreme levels
of transience.
— Social sector is too small, with
shortage of family accommodation and oversupply of flats.
— Lack of choice in the social sector
is pushing people into the private rented sector.
— Affordability is a major problem
owing to house price inflation as a consequence of the lucrative
private rented market and low average earnings.
2.2 The social rented sector in Blackpool
will remain small under all likely future scenarios. Nevertheless,
there is a pressing need for greater choice and a more balanced
mix of social rented property; it is hoped that ALMO status will
assist in remedying this. The private rented sector is expected
to remain unusually large in Blackpool. However, there must be
a radical change to improve the quality of the stock as it is
currently driving deprivation, especially in the resort core.
2.3 Using the findings of the strategic
housing study and in close consultation with local partners, Blackpool
Council is now developing a strategy for tackling housing failure
and creating mixed, sustainable neighbourhoods.
3. SOCIAL RENTED
SECTOR
3.1 The level of investment required to
meet Social Housing need in Blackpool is significant: £75.6
million is needed in order to meet the Decent Homes Standard by
2012 and £255 million up to 2033 to meet tenant aspirations.
These figures do not include monies required to provide more social
rented family accommodation, which is acutely needed if Blackpool
is stabilise more vulnerable segments of its population. On this
point, it must be noted that Local Housing Allowance and Housing
Benefit are problematic for larger families, as the market rent
for larger properties grows out of proportion to the number of
occupiers owing to the paucity of good quality family stock in
the town.
3.2 Whilst recognising that there will always
be a need for good quality rented social housing, there needs
to be a stronger emphasis on shared ownership/ low cost home ownership.
This need is partially borne out of the continuing house price
spiral and the Government's desire to encourage home ownership.
Rather than catering mainly for a lower end of the housing market
who rely on cheaper rented provision, there are masses of younger
households who typically in the past would have got onto the first
rung of the ownership ladder and now need assistance to do so.
3.3 In Blackpool, increasing home ownership
amongst target groups will be critical in delivering sustainable
communities, as well as providing good quality private rented
family accommodation. Indeed, the growing monoculture of poor
quality inner area private rented housing further underlines the
need for a shift in emphasis, which requires new social housing
focused on shared ownership to improve housing mix and help inject
more pride and stability into deprived communities.
3.4 Success in Blackpool will require a
more flexible approach by the Housing Corporation and public-private
partnerships, rather than one size fits all policies. Local market
factors (namely a burgeoning poor quality private rented sector
fuelled by "benefit tourism") means that the cost of
intervention in Blackpool is high. Even in our least desirable
areas, the average unit cost of a terraced property is over £100,000.
In these circumstances policy must focus primarily on the outcome,
ie badly needed affordable housing, as opposed to the cost of
intervention.
3.5 There is already a substantial body
of evidence on the performance of different types of landlord,
and ALMOs are consistently recognised as the most innovative.
It is with this in mind, and the need for investment, that Blackpool
is pursuing ALMO status. The National Federation of ALMOs are
been campaigning for the ability to build and this is going to
be piloted with three star ALMOs. Providing this is done in partnership
with the Local Authority this is a positive step forward. The
advantage from the perspective of the local authority is that
the ALMO is locally based with a remit to improve properties and
services in their Local Authority area with a direct link to the
Corporate and Community Plans; RSLs can sometimes have different
motivations.
4. PRIVATE RENTED
SECTOR
4.1 In Blackpool the private rented sector
comprises over 16% of total stock compared with approx 9% nationally.
In our inner areas this figure escalates to over 33%, and as high
as 58% in some wards. There is an acute mismatch between much
of our private rented stock and the needs of local residents.
Indeed, the identified desire in Blackpool is for two bedded (or
larger) self contained property, whereas our private rented offer
is dominated by Houses in Multiple Occupation—approximately
3,500, which have evolved from former holiday accommodation.
4.2 The ready availability of rented accommodation
in Blackpool, often of poor quality, concentrated in our most
deprived neighbourhoods has resulted in a spiral of decline and
extreme transience of the population in our inner areas. The availability
of this stock is attractive to the benefit dependent, and landlords
advertise all over the United Kingdom, targeting those on benefit.
This form of "benefit tourism" is fuelling this failure
of tenure in Blackpool, and the lucrative nature of the business
is keeping property values high in our most deprived areas. There
is little evidence of swathes of empty property in Blackpool;
landlords keen to enter the rented market or increase their current
portfolio quickly snap up property, typically letting it in poor
condition. The desire of residents living in poor quality rented
housing, identified in our housing needs survey, is for social
rented accommodation. However, because we do not have enough social
rented accommodation available (less than 10% compared with more
than 19% nationally), people are forced to find places in the
private rented sector.
4.3 The quality of the private rented accommodation
and the quality of its management is a huge issue for Blackpool.
We are currently working with DCLG (in conjunction with Manchester,
Salford and Middlesbrough) on the case for selective licensing
in one of our most deprived neighbourhoods. This neighbourhood
has approximately 50% of its households living in private rented
accommodation. In addition, the Council and local partners are
using freedoms and flexibilities within the Local Area Agreement
(LAA); in this case allowing direct payments of housing benefit
to private landlords meeting decent homes standards in priority
neighbourhoods. Irrespective of these innovative attempts, we
require much firmer support from central government if we are
to realistically remedy the situation. Indeed, it is our belief
that once government has fully recognised the complexity and seriousness
of the problem, it should consider making special resources and
powers available to tackle this specific issue. One possibility
is granting affected areas a special form of pathfinder status,
enabling the authority to take effective action to improve and
rebalance the housing stock.
4.4 Whilst licensing may ameliorate the
situation, Blackpool Council is of the firm view that radical
intervention is required if we are to achieve a satisfactory solution
for the longer term. Inner areas of Blackpool are remote from
open space and local services. Likely required interventions involve
some clearance and the creation of green space and community facilities,
in order to provide greater diversity of tenure and a sense of
place. These will be essential to support the wider regeneration
of the resort, so that the housing profile matches the economic
opportunities that will be created through resort Masterplan developments.
4.5 In order to tackle the housing market
failure and deliver its strategy for sustainable housing, Blackpool
Council will need input and resources from the Regional Housing
Board (RHB), Housing Corporation, English Partnerships, private
developers and landlords. We welcome the early involvement of
these agencies in the development of our approach, and hope that
future spending commitments will reflect the unique extent of
housing challenges in our town.
5. THE PLANNING
SYSTEM
5.1 In recent years the Council has worked
with partners to deliver a mix of tenure within our most deprived
areas, including quality accommodation for rent, shared ownership
and outright sale. We have done this by acquiring properties that
were for sale and in need of refurbishment, and also by acquiring
small industrial premises that sat incongruously within residential
areas.
5.2 However these premises, particularly
the existing housing sites, have a value to private landlords
as unimproved rented accommodation. As such our Housing Association
partners have often had to pay a premium for the sites. This has
led to difficulties in financing projects using the funding available
from the Housing Corporation. Consequently we have subsidised
these projects from monies accrued through section 106 agreements.
These monies have been paid as contributions from large developments
elsewhere in the Borough in lieu of providing social housing on
site as part of that development. Some £1.1 million
have been used in this way; unfortunately, owing to the lack of
large scale development currently underway in Blackpool and the
dearth of available development land, there is no more funding
of this type available to subsidise the Housing Association programme.
The Council is currently funding the Housing Associations activities
through its Neighbourhood Renewal Funding stream.
5.3 Blackpool Council and its partners are
looking to government to create a flexible, enabling planning
framework that will support innovative solutions to tackling particular
forms of housing market failure, such as that briefly described
in this submission. Wherever possible, this framework should look
to allow local multiple local authorities to act strategically
across administrative boundaries in real housing market geographies.
128 For an introduction to the position of the town
and general government policy please refer to Blackpool Council's
written submission to the recent ODPM Select Committee Inquiry
into Coastal Towns (March 2006).
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