Representatives from Jomast Developments Limited will be in attendance at the meeting to provide the Panel with information in relation to empty properties that the Company owns in Middlesbrough.
Recommendation: that the Scrutiny Panel considers whether any further information is required for the scrutiny investigation.
Minutes:
Representatives from Jomast, were
present at the meeting to provide information in relation to the current
scrutiny investigation of empty properties in Middlesbrough. Jomast Developments Limited was a private
property developer and regeneration specialist.
The Managing Director explained that Jomast was a substantial private landlord in Middlesbrough and nearly all of their properties were currently let. Whilst there were some voids, they were not available for letting due to being in a refurbishment programme.
Examples were provided of two projects that Jomast were undertaking. The first was the refurbishment of Church House, a high rise building in central Middlesbrough that had been vacant for a number of years. The project would provide 86 newly refurbished apartments and was due to complete in late summer 2025.
The second project was the refurbishment of 67 houses in the Gresham area of central Middlesbrough in Wentworth, Waverley and Union Streets and Princes Road. Artist impressions of both projects were provided to the panel. All 67 properties were currently let.
Property management was a challenging business due to the capital required and work needed to meet the necessary standards and engage good tenants. A major issue for private landlords was the capital needed to refurbish properties to the appropriate standard including the Energy Performance Certificate (EPC) requirements. Increasing the energy performance of a building required substantial investment but it was important to achieve a good rating to make it satisfactory for the occupants, especially in light of increasing utility costs. Refurbishments costs for a single dwelling could be approximately £40K and often private landlords did not have that capital.
It was confirmed that Jomast were keen to continuing investing in Middlesbrough. However, the Company was selective with the type of property purchased because in some cases, although a property could be purchased at low cost, it was not commercially viable. Projects of scale usually made more commercial sense.
In respect of tenants, tenant management was an important skill set and all tenants were vetted to ensure they had adequate income and that they would hopefully keep to their terms of their tenancy and make a positive contribution to the local community. One of the main issues experienced with a minority of tenants in Gresham was dumping refuse in the alleyways. This problem had to be addressed on a weekly basis and contributed to the management costs.
A Member queried the refurbishment of Church House, which had been subject to three planning applications since 2012. The Managing Director explained that Church House was a 14-storey redundant office block. Following the financial crash in 2008, many property developers had gone out of business. The next ten years were a very challenging period and Middlesbrough was a fairly deprived area. Jomast had been able to secure a grant of £1.4 million from Middlesbrough Council that had enabled the Company to finally get the project under way. The costs of refurbishing a high rise building in compliance with building regulations ran into millions of pounds.
In relation to a further query as to why a private company needed Council investment, the Managing Director stated that it was about viability. If the level of investment did not produce a satisfactory return it was difficult to invest the capital. Church House was purchased as a long-term investment on the basis that at some point there would be a proposition for the scheme to come forward.
In relation to referencing and Selective Landlord Licensing (SLL) confirmation was provided that generally Jomast secured good tenants and was fully compliant.
The Managing Director explained that he was happy to continue to engage with Council Officers with a view to bringing empty properties back into use as appropriate and refurbishing them to a high standard. A strategic approach was required to generally improve the market.
The Chair thanked the representatives from Jomast for attending the meeting.
The Mayor was present at the meeting and updated the Scrutiny Panel in relation to two potential new policies. One was in relation to Houses in Multiple Occupation (HMO) licensing which would affect all HMOs, regardless of size, across the whole town and the other was the development of a letting agency run by the Local Authority based on a similar model in place at Hartlepool Council.
AGREED that the information provided was received and noted.