Market shifts endanger 2010 goal
Landlords are being forced to change their decent homes deadlines after vastly underestimating the amount of refurbishment work needed.
The miscalculations have left them scrabbling to cover significant budget shortfalls and reducing the standard of improvement work they had pledged to carry out.
In one case an arm's-length management organisation found the number of non-decent homes it faced had more than doubled from its estimates.
Golden Gates Housing, in Warrington, found it had 3,157 more non-decent properties than it thought, following a more detailed check in 2006/07. A survey from 2003/04 forecast that only 3,023 needed to be made decent.
That has left it facing a £4.7 million funding shortfall which cannot be met from existing budgets. A report circulated to tenants said there was now no longer enough money to make all its homes decent. The ALMO would be forced to reduce its ‘decent homes plus' housing standard in order to make savings – and some tenants would have to wait longer to see improvements.
‘Approximately 600 customers who would have had their components replaced before 2010 will now have to wait until after 2010,' the report stated.
Sandwell Homes has also seen a significant jump in the number of homes it will have to make decent.
Paul Field, director of finance at Sandwell Homes, said its plans had been hit by the increasing price of housing in the area.
‘House prices are so high that where people had the option before to go and buy a property they don't now and they are looking to social housing,' he said.
The knock-on effect meant that some plans to regenerate estates by knocking down homes have been scrapped. In Sandwell a dozen tower blocks which were due to be demolished would now be left standing, Mr Field said. ‘They are no longer going to be demolished and that means they have to be made decent,' he said. ‘They weren't included in our business cost model. The housing market has changed.'
Mr Field said the ALMO had faced pressure to stretch its decent homes work beyond the original 2010 deadline from the government – along with all other round three, four and five ALMOs. Now it could face pressure to squeeze its spending further.
Jon Lovibond, director of investment at Sheffield Homes, said a dramatic fall in right to buy applications had left his organisation with 1,300 properties on the programme that it had not anticipated.
‘This has put additional pressure on our budget, which we have successfully managed so far as part of our continuous drive to secure greater efficiency savings in the programme,' he said.
Nottingham's troubled ALMO discovered it needed £73 million more than was originally thought to make its homes decent (Inside Housing, 11 August 2006).
A survey by estate agent Savills of 3,000 homes found the council would need £238 million to bring its homes up to standard. It had originally bid for £165 million of government funding.
Chief executive Chris Langstaff said the ALMO was now looking to defer its Audit Commission inspection.