Appeal for HCA to buy equity stakes in attempt to prevent stagnation
Coalition bids to lessen crunch blow
A coalition of housing associations will urge the Homes and Communities Agency to buy equity stakes in unsold homes to stop major regeneration projects stalling.
The landlords have been working with councils in the Tees Valley region in the north east in an attempt to limit the impact of the credit crunch.
The region’s housing market renewal pathfinder, Tees Valley Living, is also involved, leading a credit crunch task force to identify the effect of the market downturn.
Initial findings have pinpointed around 750 homes standing empty in the region.
Alison Thain, group chief executive of coalition member Fabrick, said there was an understanding of the scale of the problem. ‘The five authorities have got together and worked out there are [about] 750 houses unsold standing empty now – built and unsold. These are all new build.
’She said the biggest worry was that a number of major regeneration projects could stall because of the state of the housing market.
Ms Thain said landlords were working up a number of potential solutions – and that the housing associations were likely to approach the HCA for assistance.
‘Let us say to the HCA in Tees Valley, we want to make an offer,’ Ms Thain added. ‘We will pick up a lot of this stock. Where it is strategically important for us to keep schemes going because they are major regeneration schemes we are putting a proposal together and working that up to say [to the HCA], “become an equity partner with us”.
Ms Thain was hopeful the HCA would consider using the region to pilot the idea of becoming a shared equity partner with associations.
Sir Bob Kerslake, chief executive designate of the new agency, has previously suggested the HCA might look at overhauling the grant system to take a slice of the profits, should homes that it invests in increase in value.
He has told Inside Housing that it would look at an investment model ‘rather than a grant-based model so [that as the] value of the asset increases, you have a share of that increase’.
The Housing Corporation had previously considered the idea (Inside Housing, 17 September 2004) but did not press ahead with it amid fears it could be left exposed if developments fell in value.
Ms Thain also revealed that the focus of Tees Valley Living would no longer just be housing market renewal work. Apart from leading the credit crunch task force, it is looking at growth points in the region and will be responsible for the sub-regional housing strategy.