Britain’s great £1 home sell-off: what’s the story?
If you’ve been following this week’s current events, you will already be aware that this was the week when it became clear beyond all reasonable doubt that the UK housing market has gone as mad as a box of frogs.
‘Sure,’ you might be thinking. ‘I saw a London flat go on sale for £80million in the news a year or two back. A flat – how much more ridiculous could you get than an £80million flat? A very pretty, shiny flat next to rich neighbours, granted, but a flat all the same.’
Well it can and it has. A bid was received this week for a Knightsbridge mansion which had been languishing alone, unsold and seemingly unloved, for 3 years on London’s garish, blingtastic property market. At first glance, this is a little peculiar in itself – prime property in the guise of former residences of Saudi Crown-Prince’s don’t usually stay on the market for long. They are normally snapped up within days and weeks, typically, by a Russian oligarch or an Emirates-based oil sheikh with very deep pockets and a taste for shopping in Harrods. However when the prime property in question happens to be one with a price tag of £300million, it all becomes a little more clear – the 45-bedroom 2-8a Rutland Gate property, located directly across from Hyde Park in the heart of Knightsbridge, had been the subject of a long-running joke about how it was the singular super-prime home which was too expensive for even London’s hyper-rich.
This week a bid of £280million, equivalent to more than half a billion dollars, was received for the property, which if accepted would rank the property among the world’s top-3 most expensive homes. Obviously this is madness – it is a bid which equates to more than the national GDP of the Federated States of Micronesia. And while we’re on the subject of property price madness, at the other end of the spectrum, 216 miles away in Liverpool, the second Homes for a Pound project is entering its final week as frantic applicants scramble to apply for the chance to buy a new family home for a single £1. What’s more, this is a genuine local authority-sponsored scheme – it’s no pyramid or timeshare-inspired scam, and there is no fishy small-print. Clearly our domestic housing market is nothing if not a beast of extremes.
So, Homes for a Pound. What? Some background, please
Much has been made and said of the UK’s supposed chronic housing shortage, and certainly in in-demand locations in the south and southeast of England, particularly in London and the Home Counties, there is a genuine crisis growing as red-hot demand for housing faces off against a grievous supply-side lack of them. Property prices in these areas have soared to such an extent that the prospect of buying a home is now an impossibility for everybody but the top 1% of UK earners – aka those who enjoy a larger salary of at least £260,000*. There is a real fear that the continued rise in house prices, not to mention the bruising cost of its private rental market, is fast reaching a tipping point where financially hard-pressed Londoners will say enough is enough and leave the capital en mass. An exodus from London would prove disastrous, not only for the city’s social fabric but also for the simple fact that a flight of modest-earning essential assets like nurses, teachers, cleaners, shop staff, and police would leave the city unable to function on its most basic level. Quite simply, without the implementation of some type of affordable housing scheme, it is feared that London will collapse under the weight of its own gravity.
However this much talked about southeast-based demand-supply housing dilemma is only one side of the UK housing market coin – whereas there is an alarming housing shortage in this corner of Britain, there is an altogether different problem brewing in other areas of the country which is no less troubling. In Britain’s old industrial heartlands in Wales, the North, and the northeast, cities and communities are struggling with a housing crisis of equal severity, and yet is one which couldn’t possibly be any further away from the London crisis in terms of where it sits on the spectrum.
Whilst London is booming, to the extent that it has been brought to its knees under the weight and pressure of its standing as the greatest city in the world, Britain’s ex-industrial communities are suffering from the opposite problem, as its towns and cities quite literally slowly wither and rot away from the inside. In areas such as Stoke and Liverpool, for example, the decline of British industry – caused by the economic shift away from a traditional industrial-based, manufacturing model to a highly advanced economic system which is primarily service and digital driven – has seen once strong and financially vibrant communities lose their heritage, heart, and soul. They relied greatly on the mines, manufacturing plants, and factories that operated in their vicinity, not merely because they provided jobs but because they were the beating hearts and hubs which bound communities together. When British industry’s decline went terminal in the 1980’s, and our mines, plants and factories began to close their doors up and down the country for the final time, it would be no exaggeration to say that the heart of places like Liverpool and Stoke were ripped away.
A viable solution for tackling urban blight in Britain
Today in Britain’s post-industrial age, grand old northern powerhouses like Liverpool and Glasgow have seen their populations tumble from all-time highs of 857,000 and 1,088,000, respectively, to 466,400 and 593,245 today – a near 50% fall in population in both cities. The large-scale depopulation in these cities is not a problem which is exclusive only to them – falling populations across the ex-industrial heartlands, otherwise known as urban flight, has decimated towns, cities, and villages across Britain. The result of this, in many instances, are the almost countless deprived communities which have fallen into ruinous disrepair and neglect, and rows upon rows of empty, boarded up houses which have fallen into decay.
It is thought that there are 600,000 to 710,000 abandoned and neglected homes which are currently sitting unused and unloved in areas which are in dire need of regeneration, at a time when there are over 2million people in the UK who are desperately seeking housing. Following on from the success of a similar repopulation and regeneration scheme in the once-mighty American city of Detroit – which infamously collapsed in on itself after decades of de-industrialisation, depopulation, and the inevitable urban rot which had set in after – a pilot Homes for a Pound scheme was piloted in Stoke-on-Trent in Spring 2013, where the city’s local authorities sold-off 35 old 2-bedroom terraces in the dilapidated Cobridge area for £1. The scheme, known as ‘homesteading’, proved to be a resounding success – by the time the month-long application window had closed, over 600 families had applied for the chance to take part in this exciting project. For the families who moved into Cobridge there were undoubtedly challenges to overcome, as they struggled to get to grips with the neglect and a degree of social strain, but over time these negatives faded as life slowly returned to the areas in which they moved – today, many families in these areas are delighted to have been part of a project which has resulted in the growth of old-fashioned communities where their children can play on the street together and neighbours talk together.
The success of the Homes for a Pound scheme in raising depressed areas in Stoke was hailed across Britain and a similar scheme was soon trialled soon after in deprived areas like Toxteth in Liverpool, which proved to have no less a positive effect in giving unloved and forgotten streets a much needed boost. It is believed that the second expanded Homes for a Pound scheme in Liverpool, which will allow 150 families to buy empty, dilapidated homes in communities in need of love and restoration will be even more successful, and that it is only a matter of time before the scheme is rolled out nationwide.
Is there a catch to Homes for a Pound? And how can I apply for a £1 home
Of course – isn’t there always?
Many aspiring homeowners simply might not be willing to take on all the baggage which will inevitably come with buying a £1 home in what would be a deprived, crime-ridden area of town – it’s not a challenge for the faint-of-heart, or families who simply don’t fancy taking on what is a very challenging home-renovation job.
A willingness to take on a challenge with a dash of desire for adventure is crucial. Some of the families who have already moved into the Cobridge and Toxteth areas of Stoke and Liverpool admitted that upon initially moving into their £1 terraces, the potential lack of local facilities like shops and pubs, the social strain and risk of crime, smashed glass and fly-tipping in surrounding areas, and the all-round difficulty of living in area where urban rot has taken root so deeply over decades, hasn’t been without its moments, not to mention challenges. That said, nearly all who have taken part in the scheme have now fallen in love with the communities within which they now live, and the community spirit which they now feel part of.
Secondly, there are terms, conditions, and eligibility criteria which a Homes for a Pound applicant must meet.
For starters, anybody applying to take part in the scheme must have lived in the region where it is taking place for at least 3 years – if you were thinking of applying for the present Homes for a Pound scheme which is presently running in Liverpool, you can’t unless you already live there or nearby. Other eligibility criteria which an applicant must meet request that they have been employed for the last 2 years, must not be existing homeowner, have the right to reside in the UK, have a joint family income of between £18,000 to £25,000 – this can rise to £30,000 if the you have children – and, importantly, your new £1 home must be your main home for at least 5 years – this is to prevent buy-to-letters from simply buying up housing stock, or people who just want to make a quick buck. Lastly, applicants will have to have a sufficient credit score to be accepted for the mandatory £30,000 loan which is offered by local authorities for renovation of their new home.
An ideal solution to the wacky, imbalanced UK housing market’s problems?
In terms of whether Homes for a Pound and other homesteading schemes work in general, the proof is in the pudding – they have undoubtedly had enough of a positive effect in the areas where they have taken place in the UK, not to mention in places around the world like Detroit, and homesteading schemes in Europe, to make a potential national roll-out worth considering.
Homesteading of the £1 home variety certainly has merits for both the families moving into them and the communities in which they will reside – all things being well, everybody wins. First-time buyers who are looking at climbing up onto the first rung of the property ladder get the opportunity to buy and lovingly restore a first home, which they can only end up walking away from with a sizable profit. The communities on, the other hand, begin to regrow once more and come alive, and with this growth comes a fall in crime rates, rising house prices, investment in communities, and the gradual emergence of a happy, vibrant community.
In the words of a Stoke-on-Trent City Council representative, the Homes for a Pound project is “part of a holistic vision for social uplift and urban renewal,” – reading between the lines of this statement, a pioneering spirit and a willingness to take on a challenge is essential for potential residents. However the rewards for all involved are immense. If this project were to take off across the country over the coming years, a potential 600,000-710,000 homes would go a long way to alleviating the chronic housing crisis which afflicts other areas of the country.
Your wedding doesn’t have to cost the earth
Which of the world’s football transfers make the top 10?
We look back at a few blockbuster classics and their budgets from years gone by.
What hidden costs are involved when buying a house?