Needs some renovation

L8 is an unlikely postcode for a sales-only estate agent. It is the notorious Liverpool district that was the stage for the riots of 1981, taking in such infamous place names as Toxteth, Granby, Dingle and Lodge Lane. Only one in 10 of the area's 16,800 homes is owner-occupied, a further one in 10 is privately let and the remainder – 80% – are socially rented. But this unpromising ground has just sprouted its first estate agent.

But it's not such a mad idea as it might at first seem. Homelife is funded by Cosmopolitan Housing Association and it is an estate agency with a difference: a flat purchase fee, unconventional mortgage advice and – the antithesis of a stereotypical estate agency – a not-for-profit structure.

Although launched in May, Homelife started 12 months earlier as the brainchild of Nick Johnson, then development manager for Cosmopolitan. Homelife's goal is to raise owner-occupancy in L8 from 10% to 50% by 2008, when Liverpool becomes the European Capital of Culture – a reflection of the Merseyside pathfinder's aim of increasing Liverpool's owner-occupiers from 52% to 60%. Profits will be ploughed back into Cosmopolitan to buy more sites and look after tenants.

Cosmopolitan, which works exclusively in L8, has a strategic – but not financial – partnership with Include, one of five pilot housing regeneration companies in the area, Liverpool council and the Northwest Development Agency.

This is the first time that L8 properties have been sold by an agent with the same postcode. "The private sector has disregarded the area as low-stock, with most agencies going to the more affluent Allerton Road and city centre," says Johnson. He was born and bred in L8 and hopes that the presence of an agent will encourage selling and buying in the area.

Money isn't everything
At first glance Homelife seems like a regular agent: its windows advertise properties being sold by private landlords and owner-occupiers, it has a weekly round-up in Your Move magazine, and its staff comprise a receptionist, a sales negotiator with five years' experience in high-street agencies and Johnson, the manager.

But in its first four months of existence, it has already gone far beyond the traditional estate agent's role. Its launch event, which was attended by 400 local people, included talks from the one bank in the area, HSBC, the job centre and credit unions.

Johnson says: "The biggest bar to ownership is money, but there's also a mental block. Buying a home was something that other people did in other areas. For most of our clients, they're the first generation to think of buying and there are many who have no bank accounts and no credit status.

It was very difficult to get mortgages here – many people don't know what a mortgage is – and I know of one major building society that had a policy not to lend on property within this postcode."

Where clients have no bank account, Homelife advises them to save for six months with one of the two local credit unions to acquire credit status. The agency also liaises with the local bank manager. "We're taking the long-term view," says Johnson. "People may have to wait for a few months but they can come back."

It charges a flat purchase fee of £499 plus VAT – compared to the minimum of £700-800 charged by most high-street agents. House values are worked out broadly in line with open market values.

I know of one building society that had a policy not to give mortgages on property within this postcode

Nick Johnson, manager, Homelife

Because of its focus on encouraging buyers to come and live in the area, Homelife doesn't accept offers from private developers or professional landlords. Most clients, says Johnson, are first-time buyers and the majority are couples, young families and graduates under 30. He adds, however, that whereas 55% of clients are from L8, the remainder are moving from sought-after areas where prices are just out of reach.

The agency has 175 people on its books and, according to sales negotiator Joanne Oliver, offers are made on three-quarters of its properties after the first viewings.

So far, 24 homes have either been sold or are under offer. That is partly down to good timing, says Johnson, as private landlords are keen to sell and move on to greater things in the flourishing city centre.

Room for development
To achieve its aim of 50% homeownership without selling off Cosmopolitan's housing, Homelife needs to build homes to sell.

"We worked out that if we build between 50 and 100 houses every year we can reach the 50% target by 2008," says Johnson. So Cosmopolitan is using the agency to find sites on which it can build or refurbish housing, and then forming partnerships with developers to get the units under way.

One site Cosmopolitan has just acquired from another housing association includes a brownfield plot, for which it already has a shortlist of developers. "We bought this three weeks ago and we're due on site for remedial work in October," says Johnson. "It was previously a ruined site, with burned-out buildings and a shell remaining, and we'll be building six four-bed houses.

"People can buy them on shared ownership at 50% – an affordable amount on a £14,000 salary – and we're taking reservations for them now. Half a mile south, similar houses are selling for £450,000, but that wouldn't answer the question of occupier-ownership in L8."

Homelife is extremely valuable here, says Johnson. "It was a lot more difficult before. We had our development department and we'd buy land on behalf of partners such as charitable organisations. We had a couple of schemes for the over-50s, so grants were available. In general, though, it wasn't something we, or anyone else did."

Regeneration company Include, which works in L8, uses Homelife to sell its improved-for-sale properties. Gerard Murden, Include's managing director, says: "The agency has just sold three two-bedroom terraces for us. We bought them for £15,000 each – not via Homelife – with Housing Corporation money, refurbished them and sold them for £35,000 four months later.

"Before Homelife, we would have gone to another agent or sold them ourselves, but here's an on-site agency that is part of a housing association. The fixed rate works well for us, too. We'll be doing this again."

Include ploughed the profit from these sales back into homes, as with any other form of improved-for-sale housing. But the point is that Include has found an economic way in which to sell such properties – with the added bonus that the estate agent's profit from the sale is also being put back into housing.