Thursday, October 22, 2009
So how’s it going? According to this extraordinary story…not well. Amazingly 700 MOD homes have been left empty for five months over a delay in fitting carpets.
To his credit the Vice Admiral describes the fiasco as “totally unacceptable”. But in explanation says rather confusingly “Carpets are a difficult area. There is a risk attached”
He continues: “They were suggesting that we should add a lot of risk factor into the sum; we decided that was not good value for money for the public purse, so we took it out.”So if I understand it right, the carpet fitters were a bit pricey so Defence Estates decided to leave 700 homes empty instead of pay them too much. This ended up costing the tax payer £1.4million in lost rent. Either these were the most expensive carpet fitters in history or the Vice Admiral is right – With decision making like this he really has made a rod for his own back.
Monday, October 19, 2009
Mayfair and its environs have always been a unique property market. It’s location in the heart of London, quality of property, and prestigious neighbours have made it the UK’s premier piece of real estate for years. Its value transcends the normal workings of the property market. Anybody who needs a mortgage can’t afford it anyway. So in troubled times property investors head to Mayfair in much the way commodity investors divert their wealth into gold.
All financial safe havens attract a minority of unsavoury characters, and so it is here. Attracted by the weak pound, money is pouring in from tax havens around the world to buy up property in London’s crock of gold property district. Nothing wrong with that you might say. But the problem is remote absentee owners have little interest in running or managing their property investments as going concerns, they only care about the capital value. Ultimately their self interest begins to degrade the quality of the area. Decline through greed. Decadence if ever I saw it.
And so it is that 21 of London’s most valuable homes have been abandoned and are falling into rack and ruin. Mayfair is not unique, as I reported here recently; parts of Hampstead are suffering a similar fate. It is for exactly these sort of cases that council’s powers to intervene are so needed. Houses in the UK, however posh the address, are for people to live in, not for decadent speculation and abandonment. So power to Paul Palmer and his council colleagues to tackle this head on.
Friday, October 16, 2009
Tuesday, October 13, 2009
This week the US federal government admitted to holding on to 50,000 vacant homes. It was rightly reported as a scandal; but what about the UK? How many empty homes is our government sitting on? By my estimate the problem is proportionately worse here, but the real scandal is we don’t actually know. Data on privately owned empty homes is widely available, But official data on the government’s empty housing stock must count as one of the worst compiled and most obscure sets of statistics available. The official figure says they own 4,802 empty homes. See column “AQ” here if you want the source. What’s wrong with it?
Firstly it’s untrue. Just one government agency (Defence Estates) admits to owning double that number, and there are tens of other property-holding agencies and government departments. And that’s before we have even considered one of the biggest sinners – the NHS.
Secondly it’s complied by people who don’t know. This figure is a sum of what each local authority in England thinks there might be in its area. But they have no real way of knowing. Government who should know the answer, just collates an estimate from other people who don’t know.
Thirdly would you have found the figure buried in an obscure spreadsheet called HSSA with a column entitled “other public”? No. It’s hidden where nobody will find it, and not mentioned anywhere else (until now!).
Government Agencies like the NHS and MOD seem to have a particular problem with empty homes. The MOD has a vacancy rate of 17%, ten times the rate of an average housing association. Of course there are special reasons, but the main one is they are an organisation that does something else- defence. They are not good property managers. And of course they are publicly funded, so management failure just gets absorbed as a cost, with no adverse consequences. The MOD are not alone, it’s what happens with most big organisations that have a bit of residential accommodation on the side. Many government agencies have a historic stock of staff living accommodation that is no longer made available to staff, others like the Department of Transport historically owned hundreds of vacant homes that they held as a land bank for future road expansion.
The first step to tackling any problem is owning up to it in the first place. The government has rightly issued guidance about how others should bring empty properties back into to use, but remains highly secretive about the empty homes it owns itself. Yes there are more privately than publicly owned empty homes, but that doesn’t excuse inaction on the publicly owned ones. The first step is for government to audit it’s own housing stock and publish the list of empty homes they own. It might, like in the States, cause people to say it’s a scandal. But it will be less of a scandal than what we have now- secrecy.