BRE seeks partners for massive empty homes scheme

I have been talking to James Fisher (pictured right), an Associate Director at the BRE, and Cliff Woodward of Westworks Ltd. about a huge empty homes scheme they are working up and are actively seeking partners to deliver. An arms-length company called Empty Homes Nationwide (another EHN!) has been set up to take the project forwards.

The proposed scheme is on an unprecedented scale with Fisher determined to build towards a target of 100,000 homes brought back into use over 10 to 15 years. That might seem fanciful to some, but Fisher makes no apology for his ambitions: "empty homes is a big problem that needs a big solution". And as he pointed out to me, he was given similarly negative messages when he went looking for the funding to back the scheme up, yet has emerged with as much money as he needs - provided EH Nationwide can demonstrate its ability to deliver through successful pilot schemes.

Pilot schemes

The current task is to set those pilot schemes up to deliver 300 homes to each of five lenders in the current financial year. So the pilot phase alone equates to 1,500 homes by the end of March 2014.

If the pilots are successful then the aim would be to deliver 3,000 homes a year for each of the lenders involved. And there are other lenders in the wings. You can see where the figure of 100,000 comes from.

Fisher is keen to get agreements for pilot schemes nailed down by early September and is involved in on-going negotiations with several different partners. Some of these are local authorities and there has been a mention of the "£1 house". So homes owned by social landlords in areas of low demand look to be a high priority in sourcing units for the pilots.

More than just numbers

But it isn't just about delivering numbers: both Woodward and Fisher are keen for EH Nationwide to pursue schemes that will accommodate those in housing need, that will deliver training and work opportunities and other social benefits. Woodward himself is ex-Forces and talked of collaboration with organisations such as Homes for Heroes.

To underline this dimension, BRE has partnered up with a charity called All People All Places. The Empty Homes Project is highlighted on the front page of the website. However, All People All Places is a tiny charity and its exact role in the enterprise did not become clear in my conversations.

Unique Selling Point?

The fine detail of the delivery model seems not to be well-publicised (indeed we could find no reference to the project on the BRE website). But for negotiations to be going on we have to assume ia model is out there somewhere. It has been mooted that leasing is one of the core options but Fisher was clear that there is more than one possible arrangement.

The issues with leasing schemes for private sector empties are well known - the tension between owner expectations, costs of works and Local Housing Allowance rents, coupled with a lack of buy-in by management partners such as housing associations, can all contrive to reduce the volume of units delivered.

It seems unlikely that EH Nationwide will have discovered a magic bullet that will have eluded others with experience in the field. But if the target is empty social housing units then the picture could be quite different. Long-term lease arrangements with partners able to access funding are not unknown.

Framework contractors

And aiming at large numbers can produce economies of scale.

For example Woodward's involvement is via Westworks Ltd., a procurement vehicle for social landlords in the South West. It's one of a network of similar procurement vehicles created with support from the Homes and Communities Agency to bring down costs not just on materials but, via framework agreements, on labour and overheads costs too. Woodward's vision would involve drawing in all the sister procurement organisations to provide refurbishment options nationwide.

I expressed reservations about the use of "framework contractors" when dealing with individual street properties: won't such contractors always be just too expensive for that kind of work? But Woodward seemed confident that the framework model could deliver. And of course if the pilots focus on multiple units of social housing in close proximity with standard features then that could certainly be the case.

Partnerships

With a tiny project team but plentiful financial backing, the most realistic avenue for EH Nationwide to achieve its vision is through the building of strong partnerships with local agencies, a point well-recognised by Fisher in our conversation. Local agencies, for their part, could well benefit significantly from the secure funding stream that EH Nationwide might be able to provide.

The drive and commitment of both Fisher and Woodward was clear. They are aware of the challenges they face. If they were half as successful as they would like to be they would still have provided a massive boost to empty homes work. The devil is in the detail and we hope that their plans have been well-enough conceived to attract the partners they need. If further detail comes our way we'll let you know.

If you want to contact James Fisher please email him at fisherj@bre.co.uk

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Comments

I've heard from James Fisher that agencies with whom EH Nationwide are conducting negotations have the model explained to them but must sign a Non-Disclosure Agreement before the details are released.  So it looks as though it will be a while before the small print will appear in the public realm.