Homes Scandal?

The local Guardian has run two stories on the Orlit property buy-back; the first contained inaccuracies and misrepresentations that I needed to write in to correct, the second presents a selective view which makes insinuations about the intentions of the Council in respect of the development.

The facts are that the Council is seeking to demolish Orlit properties across four sites in order to build new council houses there. The Council can then move tenants living in these squalid, defective Orlit properties into new homes that are fit for them to live in. The tenants are being given the option of returning to the site when the new homes are built, and in the meantime being temporarily housed elsewhere in the borough, or they can take a permanent house elsewhere in the borough.

The majority of the people living in these Orlit properties are council tenants, however there are a significant number of private owners who purchased their houses at a discount under ‘right to buy’. To be able to redevelop the sites the Council needs to buy back those properties. Whilst this is a difficult and unsettling situation for the owners of these properties, it is not an unusual dilemma as councils across the UK have been faced with needing to demolish and rebuild these pre-fabricated Orlit houses since they were nationally declared defective in 1984. The law states that we can offer no more than the market value of the houses we need to buy back, because it is taxpayers’ money the Council would be spending. However from the start we recognized that because these properties are unmortgageable, offering the market value would not be sufficient to allow the owners to buy a similar property elsewhere. This was not a situation I or my colleagues were comfortable with.

We therefore negotiated a deal with our partners delivering the redevelopment so that we could offer a house swap option. Private Orlit owners have the choice of swapping their current home for a new home on the redevelopment on a like for like basis in respect of the number of bedrooms. They will own these properties just as they do their Orlits, but these homes will be of a much better build quality and will be worth far more than their existing homes. Because of the higher market value there is a claw-back caveat which restricts the profit they can make if they decide to sell their new house within a few years of moving in. This is a similar caveat to that when someone purchases under right-to-buy, and with the same intention of preventing people using the deal as a way to make a quick profit rather than secure a permanent home. The new home will be given in place of paying the market value of their existing property.

The benefit of the swap option is that in recognition of the disruption and upset caused by the need to buy back their homes, the property owners will be able to stay in the same area and retain their community if they want to, as well as being in better houses of a higher value, that they will be able to sell in future should they wish to.

If the private owners do not wish to take the swap option, and having accepted the market value of their Orlit homes find that they are unable to purchase a suitable property in the borough, then the Council will offer them a council tenancy. They will still keep the money paid for their homes.

None of this mitigates the stress of people being required to move out of their homes, and that applies as much to our council tenants as it does to the private owners, and so we have sought to deal with the situation as sensitively as possible by relaying the situation and discussing the options with each household on a face to face basis with council officers.

The issue of refurbishing the properties rather than redeveloping the site has been raised. Until we had the elements in place to be able to consider redevelopment, refurbishment was the Council’s only option, and it has a duty to tenants to house them in properties that are of a decent standard. The problem with the Orlit properties is that it would cost a huge amount of money just to bring them up to an adequate standard, in the region of £90,000 per property, and that doesn’t represent good value for taxpayers’ money. The better value solution is to knock them down and start again. When we had been promised Decent Homes funds and there was no redevelopment option on the table we had a duty to seek to improve these properties. This refurbishment would not apply to properties in private ownership as once sold the Council is no longer responsible for their repair.

In recent years the Decent Homes funding was suspended, and then we heard that the amount promised had been reduced by 40%. This made the cost-benefit of refurbishing the Orlit Properties even worse as it would leave much less money to be able to bring other council properties up to a decent standard. Fortunately our partners on the Durand redevelopment were now in a position to be able to offer a proposal for the Orlit sites which included our swap option requirement. Our redevelopments work on the basis of securing funding from the Homes & Communities Agency; investment by a housing association partner – here Affinity Sutton, and the Council contributes some capital funding. The benefit to the council is having new social housing to offer tenants, and we hope to be able to increase the overall number of family homes on the sites. The Council bears the costs of buying back any privately owned properties.

The understandable distress of the private owners has attracted interest from leading local Labour Party activists, Conservative opposition members, and the local press. If these people were seeking to act in the best interest of the residents I would expect them to make sure that the Orlit owners were clear about the options available to them and to ensure that they get the best deal. To my mind the best deal for these residents is the swap option, but it was clear from their reaction at the recent Council meeting when I answered questions about the redevelopment, that this option came as quite a surprise to them. The advice the residents seem to have been given is to avoid talking to the Council and to distrust everything they are presented with.

Certainly prior to the council meeting neither the Labour representative nor Cllr Shields had sought more information from officers or myself about the situation. The Council had to invite the journalist to a meeting so that we could provide him with the facts following his initial story.

In the light of all this it seems that the only people that are truly seeking to act in the best interests of the private owners, and to fairly balance its duty to tenants with generous and sensitive treatment of those it is necessary to displace, is the Council. Maybe that is the scandal.