Housing associations in inner city Liverpool have been left at financial risk by a devastating collapse in demand, according to a shock report on the state of the city’s housing markets.
More than 11,000 homes will have to be demolished in an area covering less than a quarter of Liverpool, the study, by Birmingham university’s centre for urban and regional studies, says. In the worst affected areas, 40 per cent are owned by RSLs.

The report says the collapse of Liverpool’s “inner core” would have been worse if housing associations had not propped up the area.

It says that Liverpool’s RSLs have prevented market collapse, but their commitment to failing neighbourhoods has left them “seriously exposed”. This may not be sustainable in the medium term, it warns.

Liverpool council said the report supports its claim for the market renewal fund.

An action plan with Sefton and Wirral councils is being created, so the councils will be ready to start work immediately if the government gives it the green light. Last week, the cross-party DTLR select committee backed calls for the £8bn, 10-year fund (Housing Today, 21 March).

Executive member for housing Richard Kemp said local communities had already consented to demolishing 11,000 homes across the city.

“These new numbers are deliverable,” he said. “But without a budget we cannot go into new areas because that would raise expectations that we cannot meet. We have reached the limit.”

Liverpool Housing Trust chief executive David Bebb said associations were suffering in a policy void. “The problem of restructuring markets cannot be solved by more efficient administration.

“We have stuck with these areas but managing decline is a very expensive business,” he explained.

LHT loses £2m of rental income a year on empty homes, and spends £500,000 on security and council tax.

“We get sympathy but there is no funding stream to recognise that cost,” Bebb said.