Housing and the High Street

[Tim Lund]

Given the dire state of traditional High Street retailing, I wonder why rents don't adjust down. Part of the story is upward only rent reviews, but if - possibly thanks to these - a tenant has gone out of business, why don't commercial landlords offer a new tenant a lease at a lower rent, or even renegotiate with existing tenants? And yet we hear of landlords still trying to increase rents.

They must see some way of making money out of empty properties - and the only way I can see is as residential development opportunities. Not necessarily by hoping for Councils to allow planning use classes of existing building to change - as recommended by a right wing think tank last year - but waiting for a larger scale development of an area into residential, e.g. the current development of 255-269 Sydenham Road.

If so, it means that the way to save High Streets is to ease the general supply of housing, allowing developers to build - at higher densities - in existing residential rather than retail locations - preferable building higher than more cramped.

The background can be seen in this chart



from which it is clear that the recent decline in house completion is not so much to do with the credit crunch as part of a long run decline. In fact, like most UK corporates, I think house builders have quite strong balance sheets, so could build more houses if allowed.

The obvious culprit is our planning system restricting supply, with several inevitable consequences. First is that only higher margin development happens - e.g. for the rich. At the lower end of the market, people just have to pay up until such time as they get to the top of local authority waiting lists for social housing. Then people who do have social housing - at more affordable rents - have an incentive to sub-let , living happily albeit illegally off the excess rent our planning policies cause.

Only too believably, our government's response to the problem is to criminalise such lower class entrepreneurs; the alternative is too awful to contemplate - a further serious reduction in property prices



with consequent pain from the pages of the Daily Mail - and perhaps more seriously mortgage lenders.

The Labour Party response is to say more affordable homes had to be built, which is absolutely correct, but begs the question why it didn't happen between 1997 and 2010.

[leenewham]

The Labour party messed up with a scheme called pathfinder which was a disaster and decimated communities and has left hundreds of thousands of houses empty which we are paying money to keep empty.

It was one of the biggest wastes of money that Labour were involved with. It wasn't even a great idea to start with.

Changing shops in high streets to residential is also a bad idea. Once this changes you can't go back. It is not the solution. Mary Portas has the solution for high streets. It's simple, they just have to implement it.

[G-Man]

The Labour party messed up with a scheme called pathfinder which was a disaster and decimated communities and has left hundreds of thousands of houses empty which we are paying money to keep empty.

It was one of the biggest wastes of money that Labour were involved with. It wasn't even a great idea to start with.

Changing shops in high streets to residential is also a bad idea. Once this changes you can't go back. It is not the solution.

Agree with you completely Lee, it's not a solution. I only recently found out about the 'Pathfinder Scheme' I think it's why the large Victorian buildings opposite the library are bricked up, and are waiting to get torn down for a new development. Why they couldn't have been fixed up I don't know. A terrible scheme and made me ashamed to be a Labour supporter.

I don't know if you saw this http://www.channel4.com/news/scandal-of ... ighlighted before Christmas but it was rather good, and where I heard about Pathfinder. You can also download an app for your iphone to report vacant properties. a great initiative and excellent public service broadcasting by Channel 4.

G-Man

[Tim Lund]

Hi G-Man

Lee posted on The Great British Housing Scandal at the time here

I think initiatives such as iPhone apps to report vacant property are fine, and can make a difference by loading shame on landlords. But it must also be worth trying to understand the economic reasons why properties are left empty. The normal modern private sector tenancies are assured shortholds, giving security for the first six months, and then two months thereafter - so I can't see why landlords would not rent out for fear of getting stuck with a sitting tenant. Are there in practice other regulatory problems - e.g. that many vacant properties lack some services, so cannot be let out legally, or are tenant disputes too much of a hassle?

I suspect it's more that private landlords just aren't too interested in the cheaper end of the market, and better would-be tenants aren't interested in tenancies with such short security of tenure. So landlords just play a waiting game, assuming like so many other people that property prices will start going back up.

OK - I really don't know - but there has to be a reason out there

[Tim Lund]

The Labour party messed up with a scheme called pathfinder which was a disaster and decimated communities and has left hundreds of thousands of houses empty which we are paying money to keep empty.

It was one of the biggest wastes of money that Labour were involved with. It wasn't even a great idea to start with.

Changing shops in high streets to residential is also a bad idea. Once this changes you can't go back. It is not the solution. Mary Portas has the solution for high streets. It's simple, they just have to implement it.

Having just looked it up, I see that Pathfinder (Housing Market Renewal Initiative) was a

package of policies in the North of England aimed to address housing market failure, which was defined as housing which in local markets was priced below the build cost, such that renovations were uneconomic and the sale of property would not generate sufficient funds to move elsewhere

which is not the general situation here in London.

I found an interesting critique of Pathfinder in Liverpool with this

in the New Housing Development SPD p348 Appendix A we have: -
“..wherever possible, housing which is unfit, beyond viable economic repair or unsuitable for modern living or in areas of low demand must be cleared.”
This last proposition is dangerous: the inference is that houses that are deemed to be “unsuitable for modern living” - whatever that means – must be cleared even if they are not unfit are not beyond viable economic repair and are not in areas of low demand!
There are other problems with this SPD which I hope will be addressed. The specification of a
density between 30 and 50 dwellings per hectare precludes the creation or consolidation of the high density settlements, traditional or otherwise, which can sustain the schools, shops and services within a walkable radius and promote alternatives to car-dependent lifestyles.
And the presumption in the SPD against new housing development outside the HMRI area might
make sense in terms of bolstering a collapsing inner city housing market – as had once appeared to be the case. However, it makes no sense in terms of a perceived overriding need to attract young professionals to live in Liverpool. These two aspects of the HMRI policy are fighting each other – we will demolish traditional housing because we believe that is not the form of dwelling that aspirational people want, but we will restrain the growth of new housing in the more popular areas of the city where they might prefer to live!

From which it seems that the Council would have done better simply to allow greater housing density - "traditional or otherwise" - where people - e.g. "the market" - wanted it.

[Eagle]

As Tina says Labour say one thing but do another.

The very word Affordable housing is open to question.

All housing is affordable to some
Some people could never afford however affordable.