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The Housing Market Renewal Initiative may not be one of the more memorable examples of Blairite domestic policy but it remains one of the most controversial. Between 2002 and 2011, what was more commonly known as the Pathfinder programme resulted in the demolition of nearly 20,000 homes in the Midlands and northern England at a public cost of almost 拢2bn. 

The idea was to 鈥渞enew failing housing markets鈥� in selected deprived areas by demolishing substandard accommodation and replacing it with modern housing that would boost local property values, stimulate economic investment and drive urban regeneration. 

The reality all too often became a bizarre dystopian stalemate of half-demolished neighbourhoods severed by a Kafkaesque government policy where homes were essentially being destroyed because they were too cheap. Even worse, we can now tell, albeit with hindsight, that prevailing economic trends over the last decade probably would have seen house prices rise even in deprived areas thereby propelling the kind of market-driven regeneration the government was seeking but with significantly lower recourse to the public purse. 

One of the most controversial elements of Pathfinders was the demolition of thousands of Victorian terraced houses, which Pathfinder frequently deemed 鈥渦nfit for human habitation鈥� but heritage bodies such as Save Britain鈥檚 Heritage insisted could be refurbished. 

Now, 16 years after Pathfinder was initiated, Save Britain鈥檚 Heritage鈥檚 claim would appear to have been vindicated by the inspirational refurbishment of a neighbourhood that escaped the Pathfinder axe at the eleventh hour and has now won last week鈥檚 好色先生TV Awards 2018 refurbishment category. Welsh Streets is the informal collective name given to a series of parallel residential terraced streets in Toxteth, Liverpool. Built in the 1870s by Welsh architect Richard Owens, they were named after and built for some of the estimated 20,000 Welsh builders who helped build booming Victorian Liverpool鈥檚 expanding network of public buildings in the 19th century. 

But by the late 20th century, Toxteth and its eponymous 1981 riots had become a byword for catastrophic levels of urban deprivation and decline. With its crumbling terraces and acute poverty levels, the neighbourhood became a natural Pathfinder target in the 2000s. Welsh Streets, along with scores of other districts in and around Toxteth were earmarked for demolition. 

Brought back to life

In 2010, enthusiasm for Pathfinder had waned and the election of a coalition government more minded to refurbishment than demolition saw the scheme scrapped for good, earning Welsh Streets and its 400 empty homes a reprieve.  

Now its Victorian terraces have been lovingly restored and converted back into 299 homes, with further conversions planned in future phases. The redevelopment model is unique. Placefirst is a lettings agency that also acts as a developer and contractor. It purchased the homes, refurbished them and now offers them for short- and long-term let in a rare example of the build-to-rent (BTR) model being applied to existing houses rather than new-build flats.

BTR occupies a relatively small portion of the UK housing market. According to Martin Ellerby, Placefirst鈥檚 head of new business and innovation, the BTR rent model is central to the scheme. 

鈥淣one of this would have been possible without the BTR model. It鈥檚 a long-term investment model that doesn鈥檛 require the quick return of an immediate sale,鈥� he says. 鈥淚f we鈥檇 bought these houses to refurbish them and sell them on, there鈥檚 no way it would have been cost-effective because in that time the land values wouldn鈥檛 have increased by a sufficient margin for us to earn our money back. 

鈥淭he only way private sales could have worked would have been if we鈥檇 reduced quality or if we鈥檇 been subsidised with government grants, which we definitely weren鈥檛.鈥�

Remodelled for modern life

The quality Ellerby refers to is immediately evident when viewing the refurbished terraces. The restoration is modest yet beautifully executed, with cleaned brickwork, new windows, re-tiled roofs and carefully reconstructed heritage details such as patterned and decorative lintels, staggered corbels, recessed arches. These simple buildings have been treated to a stunning revamp. 

It鈥檚 difficult to imagine the appalling state of the terraces when work began, until you look at the streets that have yet to be restored. Ellerby recalls their condition. 鈥淲e faced every kind of problem you could imagine. Damage from water ingress, foundations that needed underpinning, fire damage, subsidence, crumbling chimneys, rot and even bats. When we began, some of these properties had already been empty for 15 years 鈥� before Pathfinder.鈥�

Internally, the results are as impressive as outside. All the houses have been renovated to EPC level B or C and reveal neutrally but robustly decorated rooms that are hardwearing enough for the rental market but finished to a standard that would attract both families and the lucrative young professionals market. A key selling point is Toxteth鈥檚 close proximity to Liverpool city centre. 

Rooms are often surprisingly generous sizes, aided by the general open-plan reconfiguration of the ground floor. While the houses were originally built for low-income families, they still reveal the late-Victorian preoccupation with daylight and ventilation and thereby benefit from bay windows and high ceilings. 

A key feature is the redevelopment鈥檚 ingenuity with internal layout. Two-, three- and four-bedroom properties have been created, a variety that has called for some imaginative reconfiguration of building footprints. Some party walls have been knocked through to allow certain rooms to extend into neighbouring plots and create a 鈥渟cissor plan鈥� of overlapping houses. The alternative would have been a straight refurb of the original houses, which would not have provided the diversity of mix that local demand required, particularly for larger family homes. 鈥淚t鈥檚 much more a remodelling than a refurbishment,鈥� says Ellerby. 

While the fronts of the houses remain largely unaltered, the rear facades have been changed radically. The 鈥渙utrigger鈥� sections of the houses 鈥� the narrower rear sections that gave the original houses their L-shaped plans 鈥� have been demolished, for two reasons. First, many of the houses were poorly built from the start, which had accelerated their advancing decrepitude over the years. The worst sections of many houses were the outriggers, so the decision was made to demolish them in their entirety. The second reason was to provide vital amenity space for gardens to the rear, where previously there had only been a narrow and wholly inhospitable alleyway snaking between the rows of terraces. Removing the outriggers has allowed for shallow private gardens and, crucially, communal areas for shared use by the residents. 

Prioritising community

These rear communal areas are joined by an excellent external works strategy that also sees narrow strips of functionally redundant front gardens removed to widen pavements. The laying of new fibre-optic cabling under the streets and the poor condition of many of the neighbourhood鈥檚 trees means that many trees have been removed, but the widened, smoothly landscaped pavements provide the feeling of traversing a boulevard 鈥� indicative of the transformative care given to communal areas as well as private ones.

Again, Ellerby says this is symptomatic of the BTR model. 鈥淲e鈥檙e here for the long term. We鈥檙e not private developers who sell on and leave; we鈥檙e landlords with an active interest in creating an attractive, communal environment where, as well as providing ongoing maintenance, we鈥檙e also able to attract tenants who want to be part of a community.鈥�

The concept of community is critical to Welsh Streets鈥� success. One of the issues regularly ignored when deprived areas are redeveloped is that deprived areas can often foster the most tightly knit communities 鈥� something that was previously evident in Toxteth 鈥� as elsewhere. A new sense of community cannot be created overnight, but Welsh Streets has provided strong framework for one to flourish. 

Accordingly, while Ellerby is happy to admit the project came with its challenges, he maintains that the BTR approach of remodelling rather than demolishing the original terraces 鈥渙ffered a unique blend of old and new that provided the best conditions for a new, 21st-century community to flourish.鈥� 

Such is the success of Welsh Streets (see 鈥淲ho lives in Welsh Streets鈥�, previous page) that it is impossible not to reflect on how close it came to never seeing the light of day if Pathfinder had had its way. By as early as 2007, Pathfinder鈥檚 days were numbered, with the Commons Public Accounts Committee savaging the programme as 鈥渁 disastrous piece of social engineering in which 拢2.2bn has been spent and 10,000 homes demolished that should have been refurbished. And there is no evidence that anything has been achieved in terms of higher house prices or quality of life for the communities involved. 

鈥淲e have wasted more than 拢2bn for nothing.鈥�

Unexpected debt of gratitude

But was it for nothing? While it is easy to look at Welsh Streets as a survivor of the Pathfinder axe that proves the programme was fatally misguided, in an ironic way these homes owe their very existence to the government initiative that set out to destroy them.

鈥淣one of this would have been possible without Pathfinder,鈥� says Ellerby. 鈥淭he long-term investment model of build-to-rent means you need a blank canvas; you can鈥檛 deliver it within individual homes or pepperpot BTR units in a meaningful way within an existing fabric. 

鈥淧athfinder gave us that blank canvas because the compulsory relocation of residents it required for demolition ensured all the homes were already empty right from the start.鈥�

If Welsh Streets does owe anything to Pathfinder, it is clearly more by accident than design. But the lessons of Welsh Streets extend far beyond Pathfinder or even the BTR sector. For in developing a simple yet ingenious formula for providing new much-needed rented residential units in derelict buildings, Welsh Streets has set a truly creative, celebratory and inspirational precedent for how affordable, high-quality housing can be delivered as Britain grapples with the housing crisis. 

The fact these results have also been achieved in a way that reconnects with local heritage and revitalises struggling communities 鈥� conditions widely prevalent elsewhere 鈥� means the Welsh Streets formula has triumphed where many have failed and should be urgently prescribed across the entire country.