Homesteading is a term borrowed from the American mid-west pioneers who staked out plots of land to build their own home. In the UK the term has been applied to schemes where empty property is made available to people at a discounted cost conditional on them renovating the property. Homesteading was popular and successful in the UK in the 1980s and 1990s, and is seeing a revival with several new schemes starting up.
How does it work?
To many people, making empty property available to people in housing need is an obvious way of tackling two social ills, while at the same time creating community benefit. Unfortunately, experience has shown that achieving this through the social housing system is difficult and has been heavily dependent on high levels public subsidy.
Homesteading however is different:
- Instead of reliance on the social housing system, it seeks to allow people who would otherwise remain social tenants to become homeowners.
- Instead of large amounts of public subsidy, it makes a virtue out of the downturn in property price and allows people to invest their time and effort (sweat equity) enabling them to create their own homes out of abandoned property.
In most cases homesteading involves selling empty properties at below market price to people who otherwise would be unable to afford homeownership. It helps them with renovating the property sometimes with the help of a grant, sometimes with training. Conditions are normally applied to ensure that only people who intend to become part of the community buy the properties. Speculators are heavily discouraged. This means that areas with high levels of vacancy and high turnover of residents can be stabilised with new long-term occupants who have a strong investment in the community.
North Benwell – In 1998 Newcastle city council sold six houses to homesteaders for £1 each in the deprived North Benwell district. An area suffering acute demand problems and haemorrhaging population. The houses belonging to the council had been empty for years. The houses were sold to local families on the housing register who renovated them with the help of a small grant. Ten years on, three of the houses are still owned by original homesteaders the others having been sold to new families. The road now has no empty properties, in short it has become an ordinary residential street. Read more about North-Benwell
Liverpool- Six houses owned by Liverpool Council, Riverside Housing Associaiton and Liverpool Housing Trust in the Lodge Lane area of the city had been empty for many years. The houses were offered for sale to people from the local area at market value (average £70,000). The conditions of sale were that the houses had to be renovated within a year and used for owner occupation. Although the houses were not discounted in price the scheme sold the properties on a building licence meaning that only a 5% deposit was needed upfront with the remainder due on completion. This meant that people could start work without the need to borrow money. When the houses were complete the renovation work had made them mortgageable allowing people to be able to borrow the funds needed to pay the balance. Despite virtually no advertising over 60 people applied for the properties. All properties were renovated successfully, helping people into homeownership who would otherwise not be able to do so, and significantly improving the area.
Stoke-on-Trent – Stoke Council working with Empty Homes has developed a large homesteading scheme to revive an area of high vacancy that had previously been destined for demolition under the now defunct Housing Market Renewal Programme. The council has agreed to sell the empty homes it owns in the area for £1 each along with a loan of £30,000 to help people rennovate the houses. Loans will also be made available for rennovating privately owned empty homes in the area. Up to 120 houses could eventually be included in the scheme. Homes will be sold to people for owner occupation. Although the scheme is yet to formally open it has recieved an incredible respone with hundreds of applicaions.
The estate was in one of the most deprived areas of the city. It was very rundown and virtually abandoned. Most flats had been acquired by the council, but refurbishment was deemed too expensive. Instead, Hulshof persuaded the council to sell the flats at discounted prices with conditions. Those conditions stated that flats must be bought by people as their sole home, and they must agree to live in it for at least a year. The purchase price of around 70,000 Euros provided the funds for a refurbishment of the building structure, common parts and structural work to the flats. The lsale of the flats was massively oversubscribed, and all works were completed within a year. The completed flats and communal garden can be seen in the photo at the top of this page.
New York – This project comprised 18 flats in three contiguous buildings in Brooklyn, New York. The buildings had been vacant for 20 years before a homesteading scheme raised enough funds to purchase and begin renovations. Homesteaders were required to contribute $7,000 worth of sweat-equity before moving in, and then had ongoing responsibilities to improve both private and communal spaces.
Rent was priced at a low-income affordable rate and a rent-to-own financing structure allowed all 18 households to gain ownership of their units and collective ownership of the buildings. The original homesteaders arrived in 1994, and as of 2011 none had moved out.
The project has created a physical and psychological anchor along Rogers Avenue, as neighbouring vacancy rates have declined and commercial space has thrived. The Urban Homesteading Assistance Board, a national US organisation based in New York City, has highlighted Rogers Avenue as a classic example of the positive impact that homesteading can have.