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Can a £140m kitchen sink really turn around Britain's sink estates?

The Government has announced that it is throwing the kitchen sink at “sink estates” in order to address the fundamental problems that come with these areas. These are well versed but crime-afflicted, dysfunctional buildings which are costly to maintain do little to solve our housing crisis.

Will £140 million do very much in practice to deal with the issue which David Cameron has focused on? On a simple pro rata analysis, this equates to £1.4m across 100 housing estates if the monies are distributed equally.

Any money is welcome, but we would argue that is a drop in the ocean when taking into account the costs involved in regeneration.

Our experience shows that regeneration schemes are fraught with problems which are ultimately costly. Taking our pro rata calculation, it is unlikely that this funding will make much of a dent in the actual costs of demolition. There are however a host of other issues which affect the successful delivery and ultimately fundable costs of regeneration. So what will affect the successful regeneration of these areas aside from purely identifying them for demolition?

  • The first point is existing occupiers. Are they going to be decanted and if so to where?
  • Are there owners who exercised under the right to buy? There are very likely to be and depending on numbers they can be costly to buy out if the CPO process is to be avoided.
  • With the abolition of lifetime tenancies will current tenants be protected in any way? If not, there is a massive hurdle to get over to get the community on board and avoid costly and delaying litigation, such as happened with Mrs Pascoe in Liverpool.
  • What will replace the existing stock? Will the numbers of dwellings increase from the current? If high rise blocks are demolished can equivalent numbers of houses replace existing unit numbers?
  • What tenure mix is proposed? Financially, regeneration increasingly stacks up on a high proportion of open market sales. If this is the case, does this really deal with the “sink estate” problem or does it just push it elsewhere by relocating the problem?
  • Are Pension Funds really interested in this as the Government has stated? Our experience tells us that funds are happy to fund completed stock but not take on development risk and rightly so, taking account of what the funds are used for.
  • Successful regeneration is not purely about housing but other necessary infrastructure such as schools, transport and employment opportunities. Without these, the same problems of crime etc may come back, if the causes of those issues are not tackled.

We do agree that there should be a focus on regeneration but to ensure successful delivery the Government should look at the real costs of regeneration and provide subsidy which eases the process through.

In addition, a focus on regeneration will rightly bring about change but it won’t deal with the wider housing crisis, because it won’t deliver the numbers required to deal with the chronic under supply. 

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at January 2016. Specific advice should be sought for specific cases. For more information see our terms & conditions on www.TLTsolicitors.com

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