Home demolition ‘compensation gap’ of £35,000

Home clearance is a necessary part of housing renewal but the compensation shortfall is ‘problematic’, a report has claimed.

Aspects of the government’s Housing Market Renewal Pathfinder scheme to renew failing housing markets could be improved according to a new report commissioned by the Joseph Rowntree Foundation.

The Sheffield Hallam University research found the Pathfinder scheme, which operates across nine areas in the Midlands and North of England, needs to provide better financial and social support to residents affected by demolition.

The researchers acknowledged the need for demolition and renewal as part of the drive to restructure weak housing markets but wanted the resulting implications to be addressed more adequately.

The report found an average shortfall of £35,000 between the cost of buying a new home and compensation received by home-owners.

Report author John Flint said: "Central government should recognise that housing market renewal funding alone is not enough to address the increasing affordability gap for owner-occupiers in demolition areas."

While some pathfinders have developed financial packages to help lower income owner occupiers, good practice needs to be spread more widely across the nine areas, the report says.