Part 1
ITEM NO.
REPORT OF THE STRATEGIC DIRECTOR OF HOUSING AND PLANNING
TO THE LEAD MEMBER FOR HOUSING SERVICES
25 August 2005
TITLE: 26 Parish View Ordsall. – Progress report – Small Scale Option appraisal.
RECOMMENDATIONS:
That the Lead Member for housing:(i)
notes the contents of this report.
(ii)
supports in principle that we should commission Taylor Jackson to
manage, and act as a managing agent for this property
(iii)
supports and authorises further work to identify budget source of funding
and rent account management resources.
EXECUTIVE SUMMARY:
1.1. As a result of letting difficulties, the property has been accepted for option
appraisal by SCC and is now categorised as a “B” void.
1.2. New Prospect Housing Limited (NPHL) Salford South consider no. 26 Parish
View to be extremely difficult to let because tenants and potential tenants
have experienced differing degrees of intimidation and pressure. They
believe problems of intimidation and vandalism will spread to numbers 25
and 27 with increasing cost being incurred.
1.3. With advice from Urban Vision, SCC Housing Strategy and Renewal have
discussed with Taylor Jackson the potential for them to take on the property
as managing agent. Taylor Jackson are a local partner and accredited
landlord and have considerable experience managing property in the area. In
response, they believe that they could identify suitable tenants and are keen
to take on the management of the property. The fees would be at their lowest
standard rates.
1.4. The possibility of demolishing no 26 Parish View has been considered. The
cost to demolish has been estimated at £42K. To this can be added loss of
property (capital) valued at £60K. This course of action may deflect attention
from adjoining properties and allow them to be re-let once the focus has been
removed.
1.5. This briefing note reflects our current position. If we are able to get an in
principle, or actual decision, to move this forward agreed then we will need to
clarify resource requirements and management arrangements.
BACKGROUND DOCUMENTS:
Small scale stock option appraisal procedure approved by Lead member 21st April
2005.
Audit Commission Key Lines of Enquiry (KLOE 3) http://www.auditcommission.gov.uk/products/guidance/0CD68C37-776C-4C8B-ACAE133F5A1F727C/KLOE3.pdf
ASSESSMENT OF RISK: Medium-high
Failure to resolve the future of no 26 Parish View is likely to result in the problems
migrating to adjoining properties. A worse case may result in 4 properties being
demolished.
SOURCE OF FUNDING:
This report seeks authority to undertake further work, which would identify funding
through savings in the management fee, current capital investment and / or
responsive repairs.
COMMENTS OF THE STRATEGIC DIRECTOR OF CUSTOMER AND SUPPORT
SERVICES (or his representative):
LEGAL IMPLICATIONS:
FINANCIAL IMPLICATIONS:
Initial assessment is addressed in 5.1. – 6.6. This report seeks authority to further
investigate sources of funding.
PROPERTY:
HUMAN RESOURCES:
CONTACT OFFICER: David Williams – Strategy Officer ext 8712
WARD(S) TO WHICH REPORT RELATE(S): Ordsall
KEY COUNCIL POLICIES:
DETAILS
Background
1. Property Details.
1.6. Address: - 26 Parish View Salford M5 3PA
1.7. The property is a three-bed, mid terrace house constructed in 1974.
1.8. This house and the dwellings close by underwent extensive refurbishment as
part of the Estate Action improvements during the 1990s. On average the
investment to refurbish and remodel dwellings amounted to unit costs in the
region of £45 - £50K.
1.9. The property was the scene of a particularly brutal murder, and as such may
be considered a “special case”. The mother of the deceased lives opposite
and overlooking the property, which is a cause of distress to her and her
family.
1.10.
The property is now categorized as a “B” void having been accepted
for option appraisal on the basis that NPHL have found it difficult to let.
2. Adjoining properties.
2.1. No 27 Parish View has recently been let having previously been unoccupied
as a result of vandalism, dumping and ASB targeting no 26. Number 27 has
also had windows smashed recently subsequent to the new tenant (family)
moving in. This may or may not be related.
2.2. No 25 Parish view has been let since September 2003. The current tenants
have submitted an urgent request to be re-housed. Local NPHL management
have not progressed this request and believe that the tenant has not followed
up the original complaint and no preventative action has been actioned.
There is an underlying danger, if we are not able to resolve the situation, that
both adjoining properties could be put forward for option appraisal, because
of letting difficulty, on the same basis as no 26 Parish View.
3. Internal consultation and consideration
3.1. NPHL strongly suggest that the demolition of no 26 would eliminate the
problem.
3.2. Greater Manchester Police (GMP) advise that they would favor demolition of
no 26 because of the notoriety of property which has lead to it becoming a
focal point for ASB. However they have made it clear that they will support
whatever position SCC adopts. GMP would be happy to meet with Officers to
discuss further.
3.3. The Neighborhood Manager has suggested that future use should be
discussed with residents, the bereaved family and Ordsall Development
Services Group before any decision is made.
3.4. Following an initial brief, the possible use of a local managing agent has been
explored. Taylor Jackson have been identified as a suitable company and
discussions have been initiated with them. They are keen to take on the
property and draft terms have been agreed.
4. Options.
4.1. Re-let.
4.1.1. It has proved extremely difficult for NPHL to undertake the intensive
management that the property requires in order for it to be successfully
re-let.
4.1.2. SCC Strategy and Planning, with advice from Urban Vision, have
discussed with Taylor Jackson the potential for them to take on the
property as managing agent. Taylor Jackson are a local partner and
accredited landlord and have considerable experience managing
property in the area. In response, they believe that they could identify
suitable tenants and are keen to work with SCC to provide a
management service for the property. Their fees would be at their lowest
standard rate.
4.1.3. We have asked Taylor Jackson to supply Urban Vision with a draft of
their standard terms and conditions for consideration. Both T.J. and SCC
recognise that this is a unique situation and that the ability of either party
to terminate the agreement on a short notice period is essential to
provide a fall back position if the arrangement is unsuccessful.
It is recommended that we enter agreement with Taylor Jackson to
manage the property for an initial period of 12 months.
4.2. We have considered the possibility of demolishing no 26 Parish View. The
cost to demolish has been estimated at £42K. To this can be added loss of
property (capital) valued at £60K. Total cost / loss of capital to SCC is £102K.
This course of action may deflect attention from adjoining properties and
allow them to be re-let once the focus has been removed, however it is
difficult to construct a financial case to support this option.
4.3. The possibility of securing (possibly three) properties long term with a view
to re-letting if the situation were to stabilize has also been considered. NPHL
have managed no 26 Parish View (one four day let period aside) as a void
since the last tenant was convicted of murder in June 2003. To maintain this
situation long term would require significant commitment from SCC, NPHL
and GMP. Experience suggests that securing the property would not prevent
further vandalism. At best this can only ever be a fall back position and not a
solution.
4.4. Although the ongoing cost of ASB complaints to NPHL and the GMP has not
been quantified they are assumed to be significant.
5. Financial summary on the basis of current information:
5.1. To let the property using the services of a locally based managing agent: This option appears to have the greatest possibility of success. The cost
would include £2.5K repair costs and management fee of £500 for 12
months. There is an additional maximum exposure of £1K for “emergency”
repairs. If successful, estimated total costs for the first 12 months would be
no more than £4K. Against this can be offset by rental income of £2.5K
(minus set up cost and management fee mentioned which would be deducted
at source).
5.2. To demolish no 26: - This course of action may resolve the problem and is
supported by GMP and NPHL, however the overall cost including loss of
asset value (£102K) is difficult to justify.
5.3. To secure long term: - The cost of “quality” security, policing and
management time has not been quantified but is believed to be significant
6. Financial Information:
6.1. If the option to use Taylor Jackson as a managing agent was progressed the
costs would be: - Repair to let costs for number 26 Parish View £1.5 to £2.5K
(NPHL estimate). Taylor Jackson let all properties with curtains and carpets
fitted. The cost of supplying these items has not yet been established, but is
not anticipated to be significant. In addition the management fee for Taylor
Jackson on the basis of an initial 12-month agreement would comprise £230
set up fee, plus £275 p.a. commission (10% deducted from rent). The
previous amounts are exclusive of VAT, which would be payable. The total
cost during the first year has been estimated at £3,005 plus potential £1K
exposure in response to emergency work.
The total rental income if the proposal were successful would be £2.75K p.a.
minus the set up and management fees previously mentioned deducted at
source.
6.2. Urban Vision have estimated capital value of property at £60K. This is at
May 2005 prices and without RTB discount.
6.3. The loss of revenue due to no 26 ongoing void status is £2.7K p.a.
6.4. Numbers 26 and 27 Parish View have been cleared of dumping on 10
occasions to date at a cost in the region of £600. In addition boundary fences
and walls have been pulled down. The cost of attending to the latter has not
been quantified at this stage .
6.5. If the worst-case scenario were to occur, problems may escalate and spread
to involve numbers 25 and 27, resulting in the necessity to demolish the
whole of the end of block including also no.28.
7. Internal Communications:
7.1. In many respects NPHL ‘s current role would be replaced although there
would be an ongoing need for NPHL to be committed to the outcome. How
this is addressed needs to be considered if the proposal is taken forward.
8. External Communications:
8.1. In response to an enquiry from Hazel Blears M.P., on behalf of the murder
victim’s family, a holding letter has been sent outlining the options considered
in this report.
8.2. There will be a need to communicate the decision to the family of the
deceased, GMP and residents.
9. Marketing and Promotion:
There are no marketing issues.
10. Press Release:
If the report is supported by Lead Member, there may be a need to be prepared
to respond to any possible adverse publicity.
11. Recommendations:
11.1.
SCC should progress and draft a management agreement with Taylor
Jackson for an initial period of twelve months. Payment would be 10% (i.e.
Tenant pays SCC standard rent from which T.J. would deduct management
fee) of rent collected plus a £230 start up fee to be deducted from the first
months rent. Rent to tenant should be fixed at normal SCC rate for the
property £57.17 per week. Taylor Jackson will need to be given access to the
property to assess repair costs plus fitting carpets and curtains and subject to
satisfactory estimate to undertake the work.
11.2.
Following commencement of the agreement Taylor Jackson to be
tasked to undertake emergency repairs up to a max value of £300 on three
occasions without the prior authority of the council. This is in order to provide,
at the request of SCC, a fast response to any vandalism, broken windows
etc. Budget source of funding needs to be identified through potential savings
in the management fee, from current capital investment, or existing
responsive repairs. In addition the management of rent revenue also needs
to be considered and discussed with NPHL.
11.3.
If agreed we need to consider how this decision will be communicated
to deceased family and whether another formal offer to re-house the mother
should be made.
11.4.
Once we have a view from Lead Member we will communicate the
proposals to the local ward councillors prior to progressing this further
12. Conclusion:
This briefing note is our current position. If we are able to get the principle, or
actual decision, to move this forward agreed then we need to clarify resource
requirements and management arrangements.