Memorandum by the Welsh Streets Home Group
(WSHG) (AH 78)
1. There is an urgent need to review the
ability of HMR to deliver affordable and appropriate housing for
allincluding those on low incomes.
2. Adjusting to radically altered market
conditions has clearly been a challenge for the HMR Pathfinder
companies who need to be offered effective means of shifting their
practice to accommodate the changing market without penalty. This
might include the suspension of all demolition targets (if indeed
they do exist).
3. The cost and other benefits of refurbishment
need to be recognised in practice, with retention and repair of
existing stock pursued in all, including ongoing HMRI scheme delivery.
4. Vacant brown-field sites must be acquired
and exhausted before any clearances are approved in order to maintain
existing affordable housing, and social benefits whilst still
delivering new housing choices.
5. Robust mechanisms for the return to occupation
of empty homes as previously recommended by the Urban Task Force
require rapid action particularly in areas where the empty homes
are in public ownership.
6. It is neither desirable nor ethical to
demolish houses on the basis that they occupy valuable land parcels
with development potential.
7. There are problems with the premise that
government has the power to influence house prices, or that such
influence is appropriate were it available.
This evidence is presented by the Welsh Streets
Home Group (WSHG) a residents group in Toxteth, Liverpool. It
reports feedback to the inquiry questions from and group members,
and the wider community.
The group formed in response to the HMRI Pathfinder
Scheme, which caused widespread concern regarding affordability
and supply of properties following proposed demolitions.
Loss of community and self-determination were
repeated worries, compounded by a disturbing absence of evidence
regarding the viability of existing housing stock. The HMR has
yet to address to address mounting problems associated with a
market boom in Liverpool.
These worries afflicted homeowners, social tenants
and private tenants, the young, the elderly, workers, claimants
and children. They affected residents who had lived in their homes
from a few months to over 50 years.
Since the HMR proposals became public in March
2004 over 200 Welsh Streets residents used the WSHG forum as a
means of expressing their concerns. Residents of the broader Toxteth
neighbourhood and Liverpool as a whole, also communicated concern.
ODPM apparently view resolution of problems
arising around HMR in Liverpool as a matter for local government.
The group respectfully suggests it is appropriate for national
government to maintain duty of care and a controlling stake in
the delivery of its important scheme. HMR has the potential to
vastly improve housing, but regrettably also the power to shatter
lives, strip assets and destroy communities.
Baseline concerns initially expressed by the
WSHG as early as August 2004 have re-emerged in the ongoing debate
around what may be viewed as a housing crisis.
It is understood that Merseyside Civic Trust,
are submitting evidence regarding the hoarding of housing supply
by RSL's in Liverpool. Therefore WSHG ask that this evidence be
considered in the context of Merseyside Civic Trust which shows
how demand for existing property has been concealed.
1. Potential benefits of and scope to promote
greater home ownership
Home ownership apparently confers many benefits
on owners. It is the most significant purchase many people make.
Investment in a property asset is likely to accrue value, provide
capital and security in old age. It removes financial responsibility
and maintenance from public and housing bodies.
Homeownership also has negative outcomes. In
instances where the market and housing stock are subject to manipulation
and enforced purchase, homeowners may be subjected to policy which
is financially and physically damaging.
So far as the scope to promote greater homeownership
is concerned there are a number of key issues.
A. Supply/Lack of supply/Control of supply
There is a lack of homes for private sale in
the Welsh Streets. At the outset of HMR a single RSL owned over
65% of all housing stock in the Welsh Streets, whilst in Toxteth
the figure is estimated at 70% of stock in RSL ownership.
There is evidence showing that both RSL tenants,
and private buyers seeking homes to own and occupy have been turned
away by RSL's.
It is thought that "right to buy"
and right to acquire' offering significant discounts to public
sector tenants have been overlooked here, and that packages could
have been offered which provided less expensive means of delivering
access to the housing market for low income residents. Use of
such strategies could deliver the aims claimed by HMR, tenure
diversification and homeownership would increase.
Further extension of the release into the market
of RSL owned properties to people wishing to move into the area
as owner occupiers would add to the implicit HMR aims of expanded
social mix, and the explicit aim of reducing void properties.
It should be noted that empty properties in the area were low
prior to the decanting the HMR scheme has inflicted on the neighbourhood.
"Some of our neighbours would have liked
to have bought their houses off their RSL landlords months ago,
but the landlord would not sell them. How is `greater homeownership'
being promoted in such cases?"
Welsh Streets resident
42 Kelvin Grove currently three flats, potentially
five bed family home owned by Liverpool Housing Trust a RSL
tenants required to leave in 1999, sealed with
tin sheet, abandoned and un-maintained. Remains empty, continues
to blight the street,
Potential buyers known to WSHG who have requested
permission to buy and occupy the property = 6
Total interest registered in becoming owner
occupiers of this property type via WSHG market research =
"We offered the asking price on 42 Kelvin
Grove, but it was rejected by LHT even though the property was
on the market. It is hard to find big houses like this to buy
in L8, after City of Culture caused house prices in L8 to rocket,
we were forced to leave Toxteth and move across the water."
Potential owner occupier; education worker
As an experiment the WSHG have conducted two
market research exercises. A property in Kelvin Grove was advertised
in a local property magazine in May 2004, and a "promotion"
of all house types in the Welsh Streets area was conducted in
July 2005. A database now exists showing unsurprisingly keen interest
in property, often "withdrawn" from letting, repair
or sales schedules by the RSL's. A range of people hoping to buy
and refurbish existing properties, have since re-registered interest,
stating their view that public funds cover the cost of renewing
roads, paving, street lighting and essential services.
Clearly homes can only be owned by individuals
and families where they are allowed to circulate in a market place.
In the rare instances when the minority supply
of privately owned stock is circulated via the market it tends
to sell quickly.
"The two bed terraced house up the Rd from
me in Dombey Street sold within 24 hours for £89K, and the
house renovated by the Trevor Macdonald show in Powis St sold
for £65K within three weeks despite being in a demolition
zone. At those prices I would not be able to afford to get into
the market, it's lucky I managed to buy when I did"
Toxteth residentprobation officer 2005
The Halifax Estate agency reported increases
in Liverpool property prices in April 2005 at 22% as opposed to
the national trend of 9.7%. Despite a general cooling of the market,
key housing issues for less wealthy residents is supply and cost
of accommodation. Those with wealthier backgrounds are accessing
the market via parental or family loans, but this is not an option
LIVERPOOL L8 (TOXTETH)
"Liverpool L8 Granby is a district just
east of the main L1 city centreclose to the Duke Street
redevelopment and South Docks. Prices have gone up four fold since
late 2002! The area is well placed to take advantage of re-developments
in the city centre and the City of Culture attractions planned
in the L1/L2/L8 areas.
Liverpool L8 Terrace prices have doubled from
lows of 20,000 to 40,000 since mid 2002the real impetus
was the successful mid 2003 bid for European City of Culture in
2008. Investors arrived and prices shot up in the last year in
this area, which is mostly close to the city centre (L1/L2 districts)."
There is a pressing need, possibly specific
to Liverpool 8 for a review of current public housing sector organisations
and local authority behaviour, if the government is serious in
it's intent to increase or even maintain home ownership and to
encourage the flow of wealth.
Proposals for the valuable Welsh Streets site
allow for the ownership of only new homes. New homes come with
a price premium, as estate agents will confirm.
2. The extent to which home purchase tackles
social and economic inequalities and reduces poverty
Manifest in this neighbourhood as the extent
to which forced removal of homes feeds social inequalities and
B. Financial means
House prices reflect the money supply. The stability
of earning opportunities have immediate effect on the demand for,
and cost of housing. Interest rates and borrowing power impact
quickly on house prices.
In the affluent South prices are higher than
in areas like Liverpool with it's lower earnings and long term
poverty. Significant "equity wealth" has accumulated
in the South, arguably a factor in increased housing cost in the
North. The increased borrowing power available to Southern, or
Irish property owners has enabled the purchase of "buy to
let property" in regenerating Northern cities.
This has affected supply, and the cost of buying
and renting accommodation in Liverpool. There is little evidence
to imply currently high levels of investment in the city is upwardly
shifting local incomes, although the cost of living in the city
is increasing .
Via rental mechanisms wealth is further concentrated
in the hands of the wealthy and until government are able to spread
earning power more evenly across the North South divide this is
unlikely to change.
An aim of HMR is to retain higher earning workers
in the city, and attract a greater social mix to pathfinder areas,
in order to foster sustainability. However if this is at the cost
of the most vulnerable doubts about the scheme will continue.
The definition of Pathfinder areas includes
reference to indices of multiple deprivation. By definition low
earnings, no earnings, scant borrowing power and shortage of capital
assets already restricts populations in the Pathfinders
Yet the majority of new homes which the Pathfinder
scheme suggests occupants of Victorian property proposed for demolition
require residents to cover significantly increased housing costs.
In some instances this represents in excess of five fold increases
in the real cost of home ownership to current owner occupiers.
Without similar increases in income, these homeowners are likely
to find themselves back in rental accommodation. Current waiting
lists are long. 18,000 people await accommodation in the social
rental sector in Liverpool, with in excess of 7,000 people living
in overcrowded conditions (Shelter report October 2005.)
Whilst residents in Pathfinder areas are apparently
able to effectively "jump the RSL queue" this may not
be viewed as a useful or effective use of public housing resources.
Apparently tenants of RSL's in receipt of benefits,
may be supplied with new build homes on the site for rent, at
rents the Council are prepared to pay in housing benefits. If
demolition and new-build is enforced it raises two issues:
How is the social rental supply on
site going to match the high demand for such property and tenure
type. At the outset of the scheme over 70% of residents were social
renters. Some will have the means to move either with or without
shared equity schemes into homeownership, but scrutiny of local
incomes implies that this will not be a reality for many. Further
social renters who are members of WSHG, or have contacted the
group express distress at their powerlessness and lack of choices
in the current scheme.
Why is there such inequity for owner
occupiers in the Pathfinder, who despite buying and maintaining
their own homes, face either increased housing costs, the reluctant
taking on of debt, or increase of debt, removal to other areas,
loss of community, and if they accept "Homeswap" exchanges,
the possibility of continued removal from the path of the bulldozers.
They will be vulnerable to fluctuation in the interest rates and
required to make higher payments on new more expensive homes.
Homeswap is a scheme via which RSL's make available
properties they already own, outside defined clearance areas.
Since Newheartlands, the Merseyside pathfinder
currently seeks 42 million pounds for clearances in their current
funding bid, a lack of confidence is developing in the "Homeswap"
scheme. It is implicit that all Victorian Housing remains vulnerable
to future clearance, particularly in areas where the RSL's hold
significant property stocks, and given the length of time the
Pathfinder Scheme is predicted to run for.
WSHG have received reports from owner occupiers
that their existing properties are being valued by the local authority
at prices up to a third lower than the valuations provided by
independent estate agents and surveyors.
"I have been offered just 42k for my house.
What can I buy in Liverpool for that sort of money? It's half
the price of a replacement terrace, and a third of the price of
a new build."
There are reports (which could presumably be
verified via the land registry) of houses purchased for demolition
at 60k to 75K which represents expenditure in excess of that required
for complete refurbishment to a 30 year life specification and
to current environmental standards.
Shared equity schemes which combine rent and
purchase have just been launched.
"As a 68-year-old pensioner and having lived
in my house for 44 years, I suddenly find out through government
intervention, my home is marked for demolition. Having bought
this house and land I thought, the rest of my life would be spent
My present home is a comfortable three bedroom
The cost of new property is as follows:
Two bedroom flat from £90,000
Two bedroom house from £105,000
Three bedroom house from £120,000
Four bedroom house from 140,000'
My option is "shared ownership", being
an OAP. This works out at paying £60,000 for a 50% share,
then £164 per month rent on a three bedroom property.
The loss of friends and neighbours, people I
have known here all these years, due to the fact they will be
re-housed, not together, but split up in and out of the area.
A community spirit that will never be repeated, due to government
Pensioner 1: ex-factory superviser
Pensioner 1; potentially forced from 3 bed Victorian
Terrace to similar sized property at Clevedon Sitethe homes
to which those threatened with demolition are invited to move.
He would be forced to take on a garden, even though he does not
want one, if he is to retain three bedrooms.
The shared ownership for the elderly scheme
would only offer a two bed flat or "cottage" unit. Many
pensioners are offered less of a home, at greater cost.
Having cleared mortgages, rental payments will
be an additional cost. If eligible for housing benefit this represents
a cost to the taxpayer, and if in-eligible for housing benefit,
the cost will be an additional sum to be found.
How does Pensioner 1 benefit? If left alone
he would be reaping significant increase in the asset value of
his existing home. This potential cost increase is repeated across
a variety of households including families and single people.
Another option available to owner occupiers
is to stay put, live in dread of a Compulsory Purchase Order and
then request Public Enquiry. This demands the ability to commit
immense human and financial resources and comes at greatarguably
unacceptable human cost. Small groups of residents with scant
resources are pitted against large organisations with vast financial
and political power, in their quest to remain in the home of their
choice, at a price they can afford.
Owner occupiers in Pathfinders are often the
first generation who have achieved home ownership, and ascended
lower rungs of the housing ladder. The HMR threatens to push them
off this rung, but could be encouraged or enforced by government
to achieve greater cohesion between it's own aims as a (self fulfilling)
scheme, and the aims of residents with regard to their investments.
After years of low market valuation the land
in Toxteth is accruing value rapidly. It seems churlish not to
allow existing owners to capitalise on their increasing asset
values, and to replace this potential with crude asset stripping.
It can be argued that the benefits of homeownership
in the house and place of choice, are forcibly removed not only
does economic and social poverty ensue, but a loss of faith in
political structures, health and well being, quality of life and
confidence in the future.
Given the real housing choice of a home which
can be afforded, as opposed to one which offers a garden and debt
and insecurity we have many residents who would like to opt for
3. The economic and social impact of current
A life of renting damages aspirations, economic
progress and choices for individuals. In the context of daily
TV output in which the wealthy flaunt via their property assets,
it the cause of stress.
People who are succeeding in their lives feel
that they are failing. This has health, family and social consequences.
Some work pays very little, and some people are never going to
earn very much. In this respect the term "key workers"
is less than useful. The social and economic structures of the
country will not function without low paid workers of many kinds,
and to view teachers, nurses and firemen as more "key"
than others reveals a lack of vision. Low paid workers are faced
with the prospect of a long wait for social rented housing, or
alternatively paying private landlords for accommodation and increasing
the owners wealth, whilst over passing empty homes on the way
to their low paid jobs.
If HMR schemes were to allowed adjust to increased
face the fact of a property values they may be able to better
exploit a real access opportunity. De facto use of refurbishments
except in exceptional circumstances where structures are deemed
dangerous by engineers results in less expensive accommodation.
This could enable increased ownership amongst
ready markets. Cost savings if re-invested into housing could
add to positive benefits for all.
The assumption that government can affect the
complex and dynamic housing market either by increasing supply,
"restructuring" markets or destroying housing stock
is problematic. It may not be within the governments ability to
exert control or even influence over the movement of wealth and
capital on the scale currently sought.
Since the ability to earn and acquire wealth,
or borrow and accumulate wealth are the issues controlling entry
to and purchase on the market, increasing supply or choice may
prove too narrow an approach to development of access and equality.