Demolition crazy
Ross Clark
While Tony Blair was making his valedictory speech to the Labour party conference in Manchester on 27 September, 60-year-old Elizabeth Pascoe was ecstatic. Not because she was impressed by the Prime Minister’s self-composed list of glorious achievements, but because the High Court had just stopped the government from running a bulldozer through her house.
Miss Pascoe’s misfortune had been to live in Adderley Street, Liverpool, in one of 500 homes scheduled for demolition in Liverpool under the so-called Pathfinder scheme. The Liverpool Land Development Company, the quango responsible and misleadingly disguised as a private company, had argued that the area needed to undergo ‘regeneration’ because many homes were lying empty and abandoned. True, many were; but that rather ignored the fact that some of the properties were still used as homes, and that kicking out long-established residents is a pretty perverse way to start the regeneration of a community.
Unfortunately, although the High Court has put a temporary halt on the demolition of Miss Pascoe’s home, it will not necessarily mean the end of the Pathfinder scheme, which blights thousands of homes earmarked in nine different inner-city areas in the Midlands and the North. Remarkably, the government persists with the scheme in spite of the fact that its original purpose has been wholly undermined by rising property prices.
When Stephen Byers, followed up by Gordon Brown in his Budget a week later, announced the scheme in April 2002, many inner-city areas were still suffering the aftereffects of the early 1990s property crash. Some of the classic Coronation Street-style terraces in Salford which had been bought by young couples in the late 1980s boom for £30,000 had collapsed in value to £10,000 or less. There were even tales of houses exchanging hands in pubs for a few hundred pounds each. Stuck in negative equity, many homeowners had simply abandoned their properties. One small grid of streets off Langworthy Road, Salford — where just a few residents remained among the boardedup properties — became almost a byword for urban decay, attracting latter-day George Orwells from all over to opine on the state of the nation.
Salford and such places, went the government’s reasoning, were entering a cycle of decline due to falling population. So why not buy up the empty properties, demolish them and replace them with a reduced number of more modern and desirable homes? That way, property prices would stop falling, negative equity would dry up and scenes of dereliction would be no more. In the words of the bumf, Pathfinder would ‘restructure failing housing markets in areas of low demand’.
The supposed surplus of property in northern cities, however, soon turned out to be illusory. At the same time as the government was proposing to demolish large swaths of inner-city housing, adjacent city centres were suddenly attracting new commerce and industry — and with them new residents. Almost immediately, the property boom which was already evident in the South spread northwards. Between the second quarter of 2002 and the second quarter of 2006 the average price of a terraced house in Greater Manchester more than doubled from £49,420 to £104,131 — a rise echoed in Liverpool and Newcastle. Houses which wouldn’t sell for £10,000 are now selling for £40,000.
Small wonder: for the most part they are good houses. While the Pathfinder scheme at first appeared to shadow the slum clearances of the 1960s, these were far from slums: they were solid, late-Victorian terraces, some of them built from solid stone, and remarkably similar to houses which in the South sell for £150,000 or more. A developer, Urban Splash, which was responsible for many of the warehouse conversion schemes which brought people back to live in central Manchester in the late 1990s, appealed to English Partnerships, the government’s regeneration agency, to reprieve the Langworthy Road houses in Salford, and has since refurbished and remodelled them selling them this summer for prices between £100,000 and £130,000. And yet in other Pathfinder areas the government still continues to favour demolition as a means of ‘restructuring’ the property market.
It is bizarre — at a time when property prices are so high that tens of thousands of 30-year-olds who have been working several years in well-paid jobs cannot afford to get their feet on the property ladder — that the government should be embarking on a deliberate scheme to reduce the housing stock in order to inflate prices further still. It would be as if the government was persisting with agricultural set-aside schemes when the country was in the grip of a famine.
Had public bodies simply bought up the derelict houses four years ago, when they could have been acquired at a low price, and refurbished them, not only would communities have stayed intact, the taxpayer would have also saved a fortune. Last year a Tonight with Trevor McDonald programme proved that one of the condemned houses in Liverpool could be refurbished for £18,000 — not much more than the cost of demolishing the property and clearing the site, let alone building anything in its wake.
After the programme John Prescott sought to reassure his critics that ‘only’ 10,000 homes were facing the bulldozer; even though a document previously published by the government had suggested that 400,000 homes might be demolished. Miss Pascoe’s home, added a statement from Prescott’s office, had to go because ‘not enough people want to live there’. But then who in their right mind is going to buy a home in a street which the government has already earmarked for demolition?
The blight of inner-city areas may have begun with a property crash and negative equity, but if these areas are still suffering from low demand it is a direct result of the Pathfinder scheme. Once the word gets around that an area is going to be demolished and redeveloped, existing residents don’t want to spend money on their homes for fear of losing their investment, and no one wants to move in. The only people who buy are speculators counting on picking up property dirt cheap, boarding them up and hoping to make a killing when the properties are bought up by developers.
When the history comes to be written of the Blair government, the housing market will go down as one of its biggest failures. The home-owning democracy envisaged by Mrs Thatcher has been undermined by an inflationary boom which has put prices out of the reach of ordinary buyers. The government’s only notable response to this has been to demolish thousands of homes which it considered too cheap. Mrs Thatcher was often accused of ignoring the interests of inner-city dwellers. True, she might have done more to stem their decline. But if you live in Adderley Street you might conclude that neglect was just a little kinder than sending in the bulldozers.
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