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You can buy a house in Liverpool for £1

Why is Liverpool City Council selling its housing stock on the cheap?

By Jonny Ball

The United Kingdom has an empty homes problem. In the midst of a housing crisis, when the average house costs almost eight times the average salary, and a generation of young people has acquiesced to a lifetime in insecure, overpriced, privately-rented accommodation, government statistics show that 200,000 homes in the UK have not been occupied for six months or more. 

Last year, Philip Hammond gave local authorities new powers to charge double the rate of council tax on empty properties, in an effort to incentivise bringing them back into use. The punitive tax is unlikely to deter the multi-millionaire investors who buy up properties as speculative assets or investment vehicles, but Liverpool City Council is tackling its own particular empty homes problem in a different way – by offering vacant, local-authority-owned housing, in desperate need of renovation, for sale for just £1.

Unlike the empty townhouses and riverside apartments that can be found in the capital, much of the empty housing in Liverpool is derelict. Looking at row after row of abandoned terraces in neighbourhoods like the Dingle or Picton, both barely a mile from Liverpool city centre, you could be mistaken for thinking the boarded-up, crumbling facades were symptomatic of problems faced by the city in the latter decades of the last century; hangovers from the haemorrhaging of jobs in the docks and traditional industries that led to mass unemployment and a simultaneous exodus of people in the ‘70s, ‘80s and ‘90s. But these streets, filled with the kind of properties which, if renovated, you’d be lucky to find in London for under £600,000, lie unused and uninhabited, not as a result of economic calamity, but as the unintended consequence of a much more recent attempt actually to improve and regenerate them.

In 2002 the then deputy prime minister, John Prescott, announced the launch of the Housing Market Renewal Initiative (HMRI), New Labour’s controversial scheme targeting nine “Pathfinder” areas in the north of England and the Midlands, in which demand for housing was relatively weak. The thinking went that places suffering through years of neglect, depopulation and economic decline should not to be excluded from the noughties housing boom. By knocking down many of the old houses and relocating the existing residents, the project aimed to reduce the gap in house prices and vacancy rates between these economically deprived areas and their respective regions as a whole.

Owen Hatherley, author of The New Ruins of Great Britain and early critic of the scheme, was unconvinced: “The clue is in the name, Housing Market Renewal. Not Housing Renewal. The basic idea was that the main problem with the North, and with Liverpool in particular, was that it was depopulating. It doesn’t really look at why it’s depopulating, which is to do with very long-term decline.” The idea with HMRI, Hatherley says, was “that richer people would move in, property values would be raised – hence Housing Market Renewal – schools would get better, and quality of life would get better because of the fact that there were now rich people living in the area.”

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This approach “works well in London, insofar as there is a constant stream of middle-class people moving to London. But it doesn’t work in Liverpool because there’s not a constant stream of middle-class people moving to Liverpool.” 

While HMRI had some success regenerating run-down estates in north Liverpool, Hatherley says the scheme as a whole “was based on this New Labour boom thinking – we’ve ended boom and bust, the good days were back, it was never going to end. And of course these things do end, and inflating a property bubble and expecting it not to burst is just f***ing stupid. And it did burst, and it burst worst of all everywhere outside of London.” Three years after the financial crisis, and a year after the election of a new government committed to fiscal austerity, HMRI’s demolition subsidy – or, for Hatherley, “slum clearance without the socialism” – was scrapped.

By the time the scheme was prematurely cancelled and funding withdrawn by the coalition, £2.2bn had been spent on the Pathfinders, £342m of it allocated to Merseyside. Liverpool, Sefton and Wirral councils had by then acquired over 2,000 properties – 42 per cent of which had been occupied – using Compulsory Purchase Orders. All those that hadn’t already been demolished now stood empty, ‘tinned up’ and increasingly dilapidated. Liverpool was lumbered with around 1000 empty homes when funding was withdrawn. Once vibrant communities had been emptied, and huge swathes of the city, in the words of the Lib Dem leader of the council at the time, resembled a “war zone”. As the number of vacant properties, or “voids”, in the council’s portfolio swelled, so did the numbers on the waiting list for social housing, from 11,500 in 2005, to 22,000 in 2010.

Liverpool City Council’s cabinet member for housing, Frank Hont, is candid about the problems created by HMRI’s cancellation: “That’s the problem for local authorities. Central government changes the rules overnight. HMRI worked for us and then bang, the curtain comes down and we can’t do it anymore. So we were left with the Welsh streets [an area of the Dingle with around 500 houses] completely empty.”

With the cancelling of HMRI, cash-strapped councils were left with the unenviable burden of derelict neighbourhoods, with all the attendant social and environmental problems that go with them, their empty roads used for little other than driving lessons and the dramatic backdrops to the BBC series Peaky Blinders. 

“We were acquiring properties all over the city, mainly with a view to demolishing them to build new homes”, says Tony Mousdale, Liverpool City Council’s empty homes manager. “The withdrawal of funding meant money wasn’t there to carry out the demolition.” With local authority budgets increasingly squeezed (Liverpool’s grant from central government has been cut by almost two thirds since Labour left office in 2010), the council had to devise new ways of dealing with its empty homes problem. The Homes for a Pound scheme was born.

It started as a pilot in 2013, “for 20 homes in the Granby, Edge Hill and Picton areas”, Mousdale explains. “When we launched the pilot we got around 750 applicants. Then in 2015 the council agreed to extend the scheme to cover around 100-120 more properties in the Picton area. We got 2,500 applicants, in addition to around about 500 applicants who hadn’t been matched up to a property or hadn’t pulled out from the original scheme – so in total we’ve been dealing with around 3,000 applicants.”

The houses are not available to anyone with £1 in their back pocket. To qualify for one, applicants must be first-time buyers, must be resident in Liverpool, must live in the property for five years before selling, and, crucially, must commit to renovating the property (often at a cost of up to £50k) and bringing it up to a liveable standard. If the houses don’t meet this standard within 12 months, the council reserves the right to take the property back with no compensation given for the work already completed. This hasn’t deterred interest in this massively over-subscribed scheme, and the idea has caught on: similar “Homes for a Euro” initiatives have been introduced in post-industrial Roubaix, outside Lille, as well as in rural towns in southern Italy.

The Channel 4 series, The £1 Houses: Britain’s Cheapest Street (pictured), has documented the lives of several new £1 homeowners over the last three years. It hasn’t always been plain sailing: these mini ghost towns have high rates of crime and anti-social behaviour, vandalism, drug use, burglary and shootings. Even once the whole process has been completed, and the houses brought up to decent standard, residents may have derelict houses as neighbours for years to come.

For some critics, Homes for a Pound is a dressed-up, gimmicky form of privatisation, a sell-off of council-owned assets on the cheap, outsourcing their renovation to private developers and owner-occupiers. Keeping those properties as council housing, refurbishing them en masse and letting them out to council tenants would perhaps be a more desirable alternative. But with the Conservatives in government, unlikely to restore local authority budgets or drop their long-standing ideological aversion to social housing, Liverpool council has little option but to deal with the problem of vacant, decaying housing now, rather than, in the words of Frank Hont, “wait for something to come over the rainbow.” Too much of inner-city Liverpool’s decaying housing stock still stands as a grim reminder of the practical effects of government cuts. “Hopefully,” Hont says, “if we get a Labour government, rules will change and they will allow local authorities to build council houses again.”

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