Stoke-on-Trent Cabinet has approved a proposal for an investigation into the feasibility of a second wave of "£1 homes".
The Report to Cabinet throws some interesting light on the success of the scheme to date, the financial models involved, and the continuing issues that need to be dealt with. The investigation would be carried out by the Private Sector Housing Team, currently managed by award-winning ex-empty-homes-officer Zainul Pirmohamed.
The 33 homes in the first wave are understood to be occupied and to be perceived as a success by the new owners. Nevertheless, council tax data for the seven streets in the Portland Street area is said to reveal 42 long-term empties from 281 in total, a rate of 15%: so the area still has a long way to go, despite focused action by the Council through a number of different approaches. This gives some indication of the difficulty in regenerating concentrated areas of smaller terraced housing in areas of low demand. The possible second wave is estimated to comprise a further 25 homes.
Financial aspects
The importance of funding availability is illustrated by the fact that £1.5million of carried-over Clusters of Empties funding is factored into the budget. Beyond that, the cumulative New Homes Bonus is considerable, but the figures would need to be revisited in the light of the current NHB consultation.
The report suggests that terraced houses (presumably unimproved) would be purchasable at around £30-£35,000; previous news stories have suggested that the improved houses could be worth about £60,000. It is not clear whether it will be essential to maintain a £1 sale price for a property that the Council has had to buy for £30-35k - this looks like an immediate loss to the Council that might be bigger than is strictly required; but strategic vision may rightly take priority over immediate financial considerations, particularly as government funding is available. In the context of other government initiatives, such as right-to-buy or the Starter Home initiative, the amount of subsidy is relatively low.
One possible consequence of these other government initiatives is that they will further compromise the regeneration prospects for areas of older housing in low-demand areas. Thus, a further injection of government cash into a new Clusters of Empties programme would certainly be welcome.
Acquisitions
The report mentions the possibity of CPO and refers to homes already in the ownership of the Council following the discontinued Housing Market Renewal programme. March 2015 revisions to the "Crichel Downs" rules around CPOs - thought in part to reflect George Clarke's recommendations - may complicate the aspect of reselling the homes, as priority might have to be given to the original owners.
You can access the Cabinet Report via our library here (Full Members only).