Select Committee on Transport, Local Government and the Regions Sixth Report


Effectiveness of central and local Government measures

19. The Government has introduced a number of measures intended to reduce the number of empty homes and is proposing further initiatives. Additional schemes have been put forward in evidence to us. These measures include action by local authorities and fiscal penalties and incentives.


Empty homes strategies and officers

20. The Empty Homes Agency has called for the introduction of a statutory duty to prepare an Empty Homes Strategy for local authorities, which would set out the actions that all council departments would take to reduce the number of empty homes.[46] However, many think that local authorities are required to produce too many strategies and plans. The Local Government White Paper[47] set out the Government's intention to reduce their number. It included a commitment to "Publish guidance to bring these plans together under the umbrella of a housing strategy."[48] Burnley Borough Council's memorandum argued that to produce a stand alone empty homes strategy would be a "diversion" and instead recommended that "Local authorities should be required to include appropriate measures in their overall housing strategy."[49] Given the many and varied causes and consequences of empty homes, we recommend that rather than develop a discrete empty homes strategy, local authorities should address the problem through a local housing strategy which takes account of different tenures and the supply and demand pressures in the local market and includes targets for minimising the number of empty homes.

21. Some Councils have appointed a dedicated empty homes or empty property officer but the evidence we have received suggests that the mere appointment of such an officer is not enough. He or she must be given a clear role, in the context of a wider housing strategy. Croydon Council's memorandum suggested that even in authorities with an empty property officer, the role can be seen as marginal to the work of the housing, planning and environmental health departments. "The empty property function at a local level is dispersed across too many departments and professions. It is fractured and incoherent."[50] The Empty Homes Agency informed us, "A local authority at the moment has not got a clue of what they need or want their empty property officer to do or even what their empty property officer can do,"[51] yet if the officer is used properly he or she can take the lead in co-ordinating activities both within the council and with housing associations, estate agents and landlords.[52] The empty homes officer also has the time to deal with the "personal and idiosyncratic" reasons for homes remaining empty, described by Southampton City Council:

    "The City Council contends that Southampton's success is partly due to the appointment of a dedicated empty property officer who, unlike other council colleagues has the benefit of time and flexibility to work through labour-intensive personalised agendas."[53]

In healthy housing markets, specialised empty homes and empty properties officers who have the time and skills to work with owners to bring empty properties back into use can be very effective. The appointment of an empty homes officer, however, will not in itself have an effect without a clear commitment from the council to the importance of the role in the context of its wider housing strategy.

Compulsory purchase of individual houses

22. When all the other mechanisms to bring individual properties back into use fail, some form of sanction is necessary. The Empty Homes Agency told us, "Westminster City Council has a very effective empty property strategy; one of the reasons for that is because they use, as a last resort, compulsory purchase orders."[54] However, much of the evidence we have received from other local authorities suggested that they currently find compulsory purchase orders (CPOs) slow and expensive and have very little experience of using them. The Local Government Association said, "CPOs are cumbersome, take a long time and you have no idea whether you are going to be successful or not until the very last minute. This means that many authorities, given the cost, are naturally reluctant to enter into those procedures."[55] Chris Brown, Chair of the Royal Institution of Chartered Surveyors' Regeneration Policy Panel, told us:

    "It is only the major local authorities that have enough people with the skills required to do CPOs. The system fell out of use for a couple of decades almost. The people who used to be able to operate it retired. Very few people, and they are only in the large authorities, are still able to operate the process."[56]

23. In an attempt to improve local authority understanding and use of CPOs, the DTLR published a Compulsory Purchase Procedure manual for local authority staff in November 2001. Both the threat and the use of compulsory purchase orders can be effective in bringing individual empty properties back into occupation. Given the geographical spread of individual empty properties, most local authorities need to have staff who are sufficiently well-trained to undertake CPOs, if necessary. We recommend that the DTLR monitor the use and effectiveness of the new Compulsory Purchase Procedure Manual and report back to the Committee in 12 months time as to whether the use of compulsory purchase has increased and the competence of local authority staff has improved as a result.

Compulsory leasing

24. The Local Government Association advocated the use of compulsory leasing,[57] a scheme used in the Netherlands, as an additional way to bring long-term, empty properties back into use:

    "This is understood to involve the local authority seeking permission to force a lease on an empty property and undertaking refurbishment costs to make the property fit and ready for letting. The property can then be used as social housing and the fair[58] rent which would be paid to the local authority, to pay off the cost of refurbishment. This cost would therefore dictate the term of the compulsory lease."[59]

Such a scheme might have an advantage over CPO as the owner retains the freehold of the property[60] and the local authority could provide guidance to the owner to encourage re-use of the property in the long term.[61] A compulsory leasing scheme does not yet appear to have been tried in this country but councils such as London Borough of Hammersmith and Fulham are keen to pilot it.[62] We recommend that the DTLR sponsor a pilot programme of local authority compulsory leasing schemes for long-term vacant properties.

Voluntary leasing

25. Voluntary leasing schemes, where a local authority or housing association takes a lease on an otherwise empty property, can also bring homes back into use.[63] They can be particularly appropriate when the barrier to the re-use of the property is an unwillingness by the owner to take on the role of landlord and the responsibilities that entails. Such schemes can provide accommodation to homeless families and individuals. Unfortunately housing benefit rules have restricted their use-the National Housing Federation argued that temporary leasing schemes could be used by housing associations to accommodate homeless families but are made extremely difficult by the administration of housing benefit which is creating backlogs in payments to landlords.[64] We recommend that the DTLR work with the Department for Work and Pensions to ensure that the administration of housing benefit does not inhibit the use of temporary leasing schemes, to accommodate homeless families and single people.


Measures introduced in the 2001 budget

26. The budget in March 2001 introduced a number of fiscal measures which should help to reduce the number of empty homes, including:

  • 100 per cent capital allowances for the conversion of space above shops into flats;

  • a reduction of VAT from 17½ per cent to 5 per cent for the conversion of residential properties into a different number of dwellings;

  • a reduction of VAT to 5 per cent on refurbishment costs for properties empty over 3 years; and

  • a zero VAT rate for sale of properties that have been empty for 10 years or more.

We questioned the Minister, Sally Keeble, MP about the effect of these new fiscal measures. Her view was that it is too early to tell.[65] We recommend that the DTLR report back to the Committee before the autumn pre-Budget Statement, on the effectiveness of the fiscal measures introduced in the 2001 Budget, in reducing the number of empty homes, indicating the locations in which they have been successful and which of the measures have had most effect.

Council tax on empty homes

27. Since the Budget, the Empty Homes Agency and others have argued for further fiscal measures, including changes to the treatment of council tax on empty homes. There is currently a 50 per cent council tax discount for unfurnished long-term empty homes and the Local Government Association argued that this gives the property owner a "perverse incentive to keep the property empty."[66] The Government is now consulting on proposals to allow local authorities discretion to reduce or remove the existing council tax discount on empty properties.[67] Unfortunately the Minister did not know how many properties might be brought back into use as a result of introducing the primary legislation required to allow this.[68] Such measures seem more likely to be effective where there is plenty of demand for housing than in areas with little or no demand, where home owners have no control over whether their property can be brought back into use. Indeed, in areas of low demand, if council tax were charged on an unsaleable property, this would be an additional burden to the home owner. We saw in Manchester how demand can vary within a local authority's boundaries. The Local Government Association argued that local authorities would need to have discretion to apply council tax to empty properties on a "neighbourhood by neighbourhood" basis.[69] Any discretionary powers given to local authorities to charge full Council Tax on empty homes must include the freedom to do so on a ward by ward basis to take account of differences in demand within a local authority area. Failure to provide for such flexibility could prove very damaging in areas where demand is low.

46   EMP49 Back

47   Strong Local Leadership-Quality Public Services, DTLR, December 2001 Back

48   Part I, Paragraph 4.26 Back

49   EMP28 Back

50   EMP88 Back

51   Q 69 Back

52   See for example, Hastings, EMP77 Back

53   EMP31 Back

54   Q 54 Back

55   Q 242 Back

56   Q 457 Back

57   Described in LB Hammersmith and Fulham's memorandum, EMP32 Back

58   For example the rental level might be consistent with average local housing benefit payments Back

59   EMP32 Back

60   Q 352 Back

61   EMP32 Back

62   EMP32 Back

63   See Q 356 for a description of the leasing schemes operated in Hastings Back

64   EMP20(A) Back

65   Q 609 Back

66   Q 254 Back

67   Council Tax: A consultation paper on proposed changes for second homes and empty homes, DTLR, November 2001 Back

68   Q 611 Back

69   Q 257 Back

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