Saving private properties

The issue is nothing new: there has been an onus on local authorities to review their private sector policies since last year's Housing Regulatory Reform Order (see "The law", below), and the Communities Plan has been in the public domain since February. But most housing professionals have focused on the plan's grander visions, such as growth areas, rather than the small print. Now, with the ODPM about to issue guidance on what must be done to improve the condition of private sector homes, councils are starting to wake up to what it means. It is not a happy awakening.

According to the English House Condition Survey, published in July, 63% of households in non-decent homes are owner-occupiers and a further 15% are private tenants. This means privately owned properties make up a third of all that fail the standard in England (see "The problem", page 28).

The Chartered Institute of Housing estimates that councils' long history of neglecting private housing means £60bn of work needs to be done if there is to be any hope of meeting the target.

"In many areas, the scale of the problem is frightening for local authorities," a senior housing source revealed last month (HT 5 September, page 9). "It will be a mammoth task. Councils have to be mindful of time."

However, local authorities have generally welcomed the new focus on private sector homes; indeed, the Local Government Association's housing unit describes the targets as "modest". This is mainly because, until the national targets are broken down geographically, it is difficult to know what exactly is expected of each. As regional housing boards allocate their funds over the next month or so, the capacity of councils to meet the targets will become clearer.

David Thompson, former head of housing at Birmingham council and currently on secondment to the LGA, says: "The emerging picture will set the regional housing boards' decisions on funding against the plan's targets to see if they meet them or fall short."

Difficult decisions
Cash-strapped councils will have to make difficult decisions about whether funds should be directed towards private or social housing. Merron Simpson, head of policy at the CIH, says: "The competition for resources to meet other, more tangible targets, such as decent homes in the public sector, means private housing is missing out. Improving private housing takes a back seat in the first round of regional housing strategies".

Many councils believe that because of political pressure, the social sector will inevitably win the battle for funding. However, the Communities Plan's challenge does not simply involve councils channelling public money into the private sector, but evolving creative strategies to persuade homeowners to invest in their own property.

Nevertheless, the government has an unrealistic idea of the resources required for the task, says Chris Wood, head of housing at Newham council in east London. According to Wood, the amount of money available for private sector housing renewal in London – £11m out of the £250m strategic investment to be made by the regional housing board – is wholly inadequate. "We could spend £11m on private housing in Newham alone next week," says Wood. "The idea that this is enough to solve the problem is nonsense."

As chair of the London directors' group of the capital's regional housing board, Wood speaks as an insider. "Strategies for private sector renewal are not well-developed in London. Some boroughs are more advanced than others," he says. Newham council's new strategy, due to be published this month, stands out from the crowd and was recently given an informal rating of 7.5-8 out of 10 by the Centre for Urban and Regional Studies, which is monitoring performance for the ODPM.

Within Newham's boundaries, there are 62,000 private sector homes, constituting 65% of its total stock. Unlike many other councils, it has developed a comprehensive strategy to raise finance, such as moving towards using grants as a basis for levering in the resources offered by equity release.

Other measures it has instituted include maximising private sector investment via RSLs and urban renewal agencies, which in some cases are killing two birds with one stone by using funds to buy up private properties, rehabilitating them and letting them as affordable housing.

Do it yourself
Most local authorities agree that the challenge of making private sector housing decent is far greater than that posed by social housing. One important difference is that homeowners have to be persuaded to make the changes themselves: councils can only offer support and advice.

With this in mind, Brent council in north-west London is directing its resources towards giving homeowners advice to encourage them to invest their own money.

Martin Cheeseman, director of housing at Brent, says: "We've taken the view that if you're a homeowner you should take responsibility for keeping your property in good repair. If you can't, then we'll help you."

We could spend £11m on private housing in Newham alone next week. The idea that this is enough is nonsense

Chris Wood, head of housing, Newham

Brent is also looking at the reasons homes in the borough are failing to meet the standard. A recent survey revealed that of its private stock (about 75% of the council's total properties), eight out of 10 failed the standard because of a lack of thermal efficiency. So, with the backing of the regional housing board, it is testing a thermal insulation package across west London.

Cheeseman is confident that Brent is on the right track with its policy but, like many other housing directors, he is in the dark over whether his targets coincide with central government's. Until then: "We're awaiting instructions from the ODPM," he says.

"I'd expect to see how local conditions match national targets and whether our target is under or over what is expected."

He shouldn't have to wait long: later this month, it will publish revised guidance to the Decent Homes Standard Implementation Plan concentrating on the private sector, and a best practice newsletter for councils compiled with the Centre for Urban and Regional Studies (see "The law", left).

An ODPM spokesperson says: "We believe that new powers to provide assistance for repairs and improvements for homes are one of the key vehicles for achieving the targets. These powers give local authorities the flexibility to devise solutions to local problems and priorities."

Sheffield council, too, is putting the emphasis on encouraging homeowners to invest in their properties. It has set up a responsible landlord scheme, a business advice unit and an academic course in partnership with Sheffield Hallam University to help landlords run their accommodation effectively. Karl Tupling, the council's head of housing strategy, says: "We hope that by providing this level of information and support, enforcement will not be necessary."

If gentle persuasion is not enough, councils have the right to enforce improvements on properties if they are in a dangerous state of repair. The Housing Bill is expected to give local authorities the mandatory right to do so, although many consider that the adverse publicity would make such a move unacceptable.

While unfit social housing is often concentrated in estates, private properties in need of attention tend to be scattered around – or "pepper-potted" – and their condition may not be well-documented. For many councils, the first step to devising revised strategies is to do a survey to find out exactly where these properties are.

Southampton council surveys its private housing every five years. It was in the process of doing so when the Communities Plan was published, so the investigation was adapted to include the decent homes standard for the first time. "We were fortunate that we received the results in time for the deadline under the regulatory reform order, so it all tied in quite nicely," says Sharon Burgess, Southampton's acting team leader in the housing renewal department.

The survey revealed that not only does Southampton face an above-average level of unfitness in its private properties, but that they are pepper-potted. Burgess says: "You're hard pressed to find whole areas for clearance. The problem is with individual properties or semi-detached houses, making it difficult to achieve economies of scale."

Southampton's strategy is to target unfit properties first and resort to using grants for those in most need, spending £12.7m over the next three years. It has also set up an innovative loans scheme to enable owners to use equity to carry out improvements.

Market renewals
Further North, the situation is complicated by the nine market renewal pathfinders introduced in April 2002 to tackle acute areas of low demand, for which the first allocation of funding was announced in June this year. Local authorities in these areas will work alongside pathfinder partnerships to demolish, refurbish and build homes in order to restructure the housing market.

It is not yet clear whether the national targets set in the Communities Plan will encompass the properties targeted by these pathfinders. It is also too early to say how councils are adapting their private sector renewal policies.

However, the fact that Sandwell council's former head of private housing renewal has been seconded to lead the Birmingham Sandwell pathfinder suggests that, for this project at least, the strategies are on track to be fully integrated.

Pathfinders will bring much-needed resources to certain low-demand areas, but for the vast majority of local authorities scarcity of resources remains the key issue. With regional housing boards in the process of taking over the allocation of funds, the water is muddied still further.