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Selling homes for £1 gives local authorities the power to revive deprived communities
In the city of Stoke-on-Trent, England, the council is offering 25 homes for sale for just £1 each. The houses are mainly two-bedroom Victorian terraces, in a deprived area of the city where there are a large number of empty properties, and which has a reputation locally for high levels of disorder and antisocial behaviour. Clearly, the city council hopes the “Reviving Communities Scheme” will do just that.
This doesn’t mean that Christmas has come early for private landlords or property developers in Stoke. These properties must be renovated and lived in, rather than demolished or rented out, and there are strict criteria which applicants need to meet.
Would-be £1 home owners must have a local connection and earn no more than £27,000 each year if they’re a single person (up to £60,000 if they’ve got a family with children). This scheme includes a loan of up to £60,000 – repayable over 15 years – which funds renovations carried out by the council before new owners move in. This way, new owners can avoid the stressful process of organising the renovations themselves.
The big issues
Faced with ongoing austerity measures, Stoke-on-Trent City Council has had to make £172m in savings since 2010 and will need to find a further £34m by 2020. So one might wonder why the council doesn’t simply renovate the properties to rent them out and generate much-needed income in the process. The answer is that – rather than being a money-maker – this scheme sets out to address some of the deepest social issues facing Britain today.
It is estimated that there are more than 589,000 empty homes in England and Wales – more than 200,000 of which have been empty for six months or more. Against the backdrop of severe housing shortages across the UK – and an anticipated need to build over 210,000 homes per year – the £1 scheme can put disused homes back into use, providing short-term relief from some of the pressure on the housing market and freeing up extra rental spaces in the city.
The scheme has been introduced at a time when many young people are struggling to buy a home. Incomes are stagnating and, on average, house prices are 7.6 times the average UK salary, up from 3.6 times earnings in 1997. The Council of Mortgage Lenders recently revealed that less than 50% of people under 35 believe they are likely to buy a home within 10 years.
While there have been calls for young people to spend less and save for a deposit, the reality is often that young people – who are far more likely to live in private or social rented housing – routinely pay more in rent than they would for a mortgage.
The uncertainties of living in rented housing – exacerbated by short-term lets – have recently spread to council tenants and other social renters. The £1 homes scheme offers residents, and especially younger people, an affordable way to buy their own homes and escape these uncertainties.
Small but successful
Schemes like this have been tried before – in Stoke back in 2014, and in cities as far afield as Liverpool in the UK, Roubaix in France and Abruzzo in Italy. The previous scheme in Stoke proved remarkably popular, attracting hundreds of applications for just 35 homes.
There is evidence that they work, too – Stoke’s first £1 homes scheme led to reductions in disorder and anti-social behaviour, as well as improvements in local health outcomes and housing conditions in the local area. Meanwhile, The Portland Inn Project has encouraged local organisations to work together to turn the former Portland Inn into a community centre. In working to breathe new life into the former pub, they have helped local residents develop a stake in the community.
Schemes such as this can work in tandem with other initiatives to deliver real benefits for local people. For example, Stoke has been shortlisted for the UK City of Culture 2021 contest. The ambition to revive declining communities and support local cultural and heritage industries formed a key part of the bid.
In this sense, the £1 scheme can be seen as part of the broader plan to encourage and sustain the city’s long-term cultural revival. It has given the council a means to encourage and maintain stable inner-city communities, while delivering benefits for residents by creating a sense of safety, belonging and ownership. It can also encourage younger residents to make a long-term commitment to the local area, helping places to become communities that survive and thrive long into the future.
On their own, small projects such as £1 houses won’t give all residents a chance to own their own home – nor can they alleviate the insecurities of renting or make up for the nation’s housing shortages. Only the national government has the power to solve problems of this scale. But they do give local authorities the means to encourage a sense of ownership in their local communities. And for Stoke – and many other post-industrial centres across the UK and Europe – that commitment from residents is what helps cities thrive.