Liverpool "Homes for a Pound" scheme - major expansion on cards

Liverpool City Council's Cabinet Committee is to consider a major expansion of the "Homes For A Pound" scheme at its meeting on April 2nd, to be dubbed "Homes For A Pound Plus".

A report in the Liverpool Echo also features some video clips of a house that has already been refurbished through the 20-property pilot scheme. Now the aim is to bring another 150 properties into the initiative in the Picton area An innovative aspect of the new proposal is a pilot "Shops For A Pound" strand, addressing vacancy in the commercial units on nearbby Smithdown Road, an A-road leading into the city from Speke and Widnes.

The homes scheduled to be brought into the scheme seem to be in a "clearance area" and the Council is intending to ask the HCA to release it from charges on the properties which it acknowledges are being sold at less-than-best value. This will be an interesting part of the exercise and highlights the rarely-ackonwledged aspect that such schemes do involve a transfer of value from the public sector to the private sector. It is never clear in these cases whether the homes might instead be sold for £100, £1,000 or £10,000. The "£1 home" is a powerful brand however.

Key sections of the Cabinet Report read as follows:

Executive Summary

On 19 December 2014 Cabinet adopted a Ten Point Plan for bringing a further 2,000 empty properties back into use. This set out a number of initiatives for tackling empty homes. The report included a proposal to introduce ‘Homes for a Pound Plus’ which builds on the success of the Homes for a Pound pilot scheme.

This report outlines the plans for bringing forward ‘Homes for a Pound Plus’ which will deliver an extra circa 150 homes brought back into use with a particular focus on regenerating the Picton area. The report also details proposals for a small scale Shop for a Pound scheme to be piloted in the Picton area as part of a comprehensive approach to neighbourhood regeneration.

Background

In February 2013, Cabinet approved a homesteading programme for the Granby Four Streets, Arnside Road and the Webster Triangle area of the City. This programme was called Homes for a Pound and attracted considerable media attention and public interest by offering 20 homes for eligible applicants for £1. This report also made reference to the adjacent Picton Phase 3 (clearance area) and it is now proposed that a project is developed to refurbish void properties in the Picton Phase 3 area alongside Webster Triangle.

A formal application process was launched in April 2013 with clear eligibility criteria and conditions. To be eligible applicants needed to live or work in Liverpool, be first time buyers and be in employment. Selected applicants would be required to live in the property for a minimum of five years and not permitted to sub-let it. The scheme was massively oversubscribed and all 20 available homes have now been matched with relevant applicants.

The selected properties have been made available to the successful applicants through a licence agreement initially while the refurbishment works are undertaken. On satisfactory completion of the works the ownership of the property is transferred to the purchaser.

The Homes for a Pound pilot has been positive for a number of reasons:

  • It has levered in around £750,000 of private investment in long term vacant dwellings;
  • The scheme has complemented other regeneration initiatives going on in the target areas;
  • It has provided home ownership opportunities for people who would otherwise have been excluded due to mortgage lending restrictions; and,
  • The pilot has enabled the development of a delivery model that includes a robust assessment process, an appropriate legal agreement and suitable insurance cover.

Homes for a Pound Plus:

The Cabinet report of 19 December 2014 signalled the intention to build on the success of the pilot scheme by expanding the scope and extent of this approach. The key elements of Homes for a Pound Plus will be as follows:

  • A focus on circa 150 Council owned properties in the Picton area which are currently void. The properties will be split into five separate phases based upon condition and geography with each phase released to the market sequentially to avoid market saturation and better manage demand;
  • Exploration with relevant social landlords to include void properties they own within the scheme;
  • Undertaking of remedial structural works on those properties in particularly poor condition to make them viable for the Homes for a Pound approach;
  • A review of the current waiting list to establish whether those who applied in April 2013 are still eligible and interested in the scheme;
  • Opportunities for new applicants to express an interest in the scheme; and,
  • The development of a financial assistance product for applicants who are not in a position to fund refurbishments from their own resources.

This package of measures building on the development of the new Archbishop Blanch secondary school to the west of Tunstall Street offers a clear plan for the regeneration of Picton.

Homes and Communities Agency (HCA) Charges

There are HCA charges registered against the properties and agreement will be required with the HCA to release their charges in order for the Council to dispose of the properties. The agreement for release with the HCA will need to be documented by a deed of variation to the current agreement with the HCA.

Shops for a Pound

The Council currently owns a number of shop units along the Smithdown Road corridor abutting the proposed Homes for a Pound Plus area in Picton. These shops are currently vacant, require investment and are in an area where it will be difficult to find a viable commercial future for the shops.

Leaving these shops vacant or failing to find a sustainable future for the units would significantly impact upon the proposed Homes for a Pound Plus initiative. It is therefore proposed that the Director for Regeneration and Employment be requested to develop a ‘Shops for a Pound’ scheme for these units – exploring the opportunities to either sell off or lease the units to businesses who would be able to invest in the sites and bring them back into a use in a manner that would be appropriate and add value to the local community.

A potential sting in the tail is whether the Crichel Down rules are engaged, as the homes were bought under "threat of compulsion". The normal arrangement would be that the homes should be offered back to the original owners at market value. The owners might have been private landlords. The Cabinet report discusses the Crichel Down rules in the following terms:

This government policy guidance outlines how properties acquired for regeneration under Compulsory Purchase Orders (CPO) powers or threat of CPO are ‘offered back’ to previous owners, should the original purpose of the acquisition change. As the properties to be included in the scheme were acquired under the “threat” of compulsion the Crichel Down Rules (“Rules”) are prima facie engaged.

There is an expectation that public bodies comply with the Rules and the Council has taken Counsel’s advice on the application of this policy for this proposed new scheme. The Council are advised that the Council’s Cabinet are to determine if the Homes for a Pound Plus and Shops for a Pound are exempt from the Rules and the requirement to ‘offer back’ the ‘land’ (at it’s current market value) does not apply. An exemption could apply as selling the properties back to the original owners is not likely to achieve the original purpose of the acquisition i.e. to improve housing quality, choice and amenity and that offering the properties back would be inconsistent with the original project (paragraph 15 (part 5) of Part 2 of Circular 06/2004). It is submitted that this is the case because the aim of the acquisitions was to deliver a step change in housing conditions in the area, and it is likely that the sale of the properties back to the same owners would result in the same issues as existed previously, whereas the proposed Homes for a Pound Plus scheme will ensure that the properties are improved to a decent standard.

Should the Council’s Cabinet agree that the proposed project is exempt from the Rules and offering the properties back to the original owner does not apply, the Council will need to write to all persons from whom property was purchased to notify them of the change in the proposed regeneration scheme and that ‘offering the property back to them’ is exempt from the Rules and that it is reasonable that for the Council to achieve the original housing objectives it is not required to ‘offer back’ the properties at full market value to the original owner. Notices will also be placed on the site for a period of two weeks to ensure other interested parties are aware.

This is one of the points (Point 9) identified by George Clarke in his advice about regeneration, advice which seems to have become policy and which the Council (or its developer PlusDane) has already fallen foul of in the case of the Welsh Streets redevelopment proposals. In principle, one would have thought that the rules would have to be applied case-by-case: in other words, some previous owners might well be capabel of producing the improvements in quality of housing that underpinned the original clearance programme.

News type: 
Status: 
Organisation: 
Places: