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


The National Problem
(a)The poor quality of the data on empty homes makes it difficult to ascertain how many there are. As a result, decisions on resource allocation to deal with the problem are based on inadequate information. We recommend that local authorities should improve the accuracy of data on empty homes in Housing Investment Programme returns, particularly those in private sector ownership. We also recommend that Geographic Information Systems should be developed in partnership between local authorities and the Housing Corporation, to improve information about empty homes and the wider housing market (paragraph 11).
(b)There is clearly a great deal of confusion and ambiguity amongst local authorities about how council tax data can be used to address the problem of empty homes. We are amazed that the DTLR has not yet followed the sensible advice of the Information Commissioner to clarify the position on the use of Council Tax data to address the problem of empty homes with an Order for non-personal data and primary legislation for personal information, such as names and addresses (paragraph 13).
(c)We recommend that the revised guidance for departments and agencies on "other public sector" vacant stock require them to make an annual report on their holdings of vacant housing to each relevant local authority (paragraph 14).
Action by local authorities
(d)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 (paragraph 20).
(e)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 (paragraph 21).
(f)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 (paragraph 23).
(g)We recommend that the DTLR sponsor a pilot programme of local authority compulsory leasing schemes for long-term vacant properties (paragraph 24).
(h)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 (paragraph 25).
Fiscal measures
(i)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 (paragraph 26).
(j)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 (paragraph 27).
(k)We recommend that Government reduce VAT to 5 per cent on housing refurbishment projects and raises it to 5 per cent on new build, private greenfield housing schemes (paragraph 29).
Using empty properties to meet housing need
(l)Empty properties are indeed a wasted resource, particularly in areas where housing need is high. The current Best Value Performance Indicator is inadequate and we recommend that in such areas, local authorities should set Best Value targets to reduce the number of empty homes in all tenures (paragraph 31).
(m)Aggregate figures on empty homes should identify the local authority and registered social landlord empty homes which are being held for demolition / refurbishment, separate from those which are intended for re-letting. Local authorities in healthy housing markets holding more than 2 per cent of their stock vacant and not for regeneration should be required to undertake an immediate review of the housing management function (paragraph 33).
(n) We recommend that councils should be allowed to suspend the Right To Buy where they have passed a formal resolution to consult on clearance to save the additional cost to the public sector of purchasing homes from private owners in places where house prices are high (paragraph 34).
Licensing private landlords
(o)The Government's proposals for the licensing of private landlords do not go far enough. Across the country some of the poorest tenants are living in some of the worst quality private rented accommodation. The Government should give all local authorities the discretion to license those private landlords whose tenants are in receipt of housing benefit. Only properties which are fit for habitation should receive a licence (paragraph 36).
Failing markets
(p)We recommend that local authorities and registered social landlords should work with private sector organisations such as the Council of Mortgage Lenders and local lenders, estate agents and developers to improve information about housing markets in general and specifically to identify housing markets 'at risk' of decline. This is particularly important at the planning stage prior to the development of new initiatives. This intelligence should feed into Regional Housing Statements and other regional strategies and be up-dated every year (paragraph 42).
Housing benefit
(q)We recommend that the DTLR should report back to the Committee on the extent to which unusually high housing benefit payments persist in low demand areas, 12 months after the introduction of the private sector landlord licensing scheme (paragraph 49).
Registered social landlords
(r)If the problem of empty homes worsens, registered social landlords might go out of business or face persistent operating deficits and new larger stock transfer organisations could find themselves at risk. This would have a devastating effect on lender confidence in the registered social landlord sector. The Housing Corporation needs to ensure effective co-ordination of investment and management of disinvestment and promote collaboration by registered social landlords in areas of housing market decline. We also recommend that the Housing Corporation should develop contingency plans, in case a stock transfer association is affected by its exposure to high levels of low demand (paragraph 56).
Anti-social behaviour
(s)Anti-social behaviour is a menace and measures to deal with it do not yet appear to have been fully and effectively implemented. Some policies such as evictions by social landlords have had unintended consequences, moving the problem around, sometimes concentrating it in the private rented sector, rather than tackling the causes. The Government's recent proposals for improving the processes for implementing anti-social behaviour orders are timely (paragraph 76).
(t)Local authorities should ensure that landlord licensing schemes link into local agencies such as the police and youth offending teams, who can provide the appropriate response to anti-social behaviour problems (paragraph 77).
(u)Whilst the measures described above are welcome, it is unlikely that they will deal with the scale of problems caused by crime and disorder and it is bewildering to the local population in these areas not to be afforded the protection that seems to be the right of the rest of the community. It is not for us to solve this problem but it suggests that more funding should be provided for the police in such areas and that the public would willingly pay more in taxes (paragraph 78).
Movement from high demand to low demand areas
(v)We recommend that the DTLR and the Housing Corporation examine ways to enhance the promotion of inter-regional mobility, potentially through an extension of the choice based lettings scheme, with a particular focus on how "receiving" authorities can provide incentives to move (paragraph 80).
(w)We recommend that local housing strategies follow Rochdale's good example to promote moves between expanding and declining communities. The DTLR, through Government Offices for the Regions, should monitor the strategies to ensure that this is happening, especially where such moves can reduce racial segregation. Significant investment in community relations, policing and other services, is needed alongside such housing initiatives (paragraph 82).
The need for a new approach
(x)Traditional measures to alleviate the problem, for example the renovation of houses, will be unsuccessful and unsustainable if they fail to take account of housing market conditions. We recommend that such interventions should not be targeted at individual houses or estates without a clear understanding on the part of the local authority that market conditions are such that the investment will be sustainable (paragraph 86).
Measuring performance
(y)On the basis of the evidence that we have received, the Department will not be able to meet its commitment to turn around the incidence of low demand by 2010. We recommend that it develop a realistic programme for the period between 2002 and 2010, including interim milestones so that progress towards the target to turn around the incidence of low demand by 2010 can be monitored (paragraph 101).
(z)We agree with Burnley Council's recommendation that "the Public Service Agreement national targets should be amended to include provision for [decency standards in] private sector housing." (Paragraph 102).
Housing market renewal
(aa)Increased choice in tenure, sizes and types of home is essential to bring about change in inner urban areas. The changes required will however vary from place to place, reflecting the economic viability of areas. We recommend that a clear conurbation-wide strategy and masterplan for the redevelopment of the area should be in place before any significant demolition begins. Strategies must be developed swiftly and sensitively to try to minimise blight. Where proposals are developed to reduce the number of houses in an area, particular attention needs to be paid to creating sustainable future uses for the sites. Demolition strategies should also take account of the value of retaining some older buildings in creating housing choice (paragraph 111).
(bb)A new approach to housing market renewal must be based on the whole conurbation or sub-region, which will have within it working, at risk and failing housing markets. We support the view that proposals for housing market renewal areas should be based on close co-operation between neighbouring local authorities and housing associations, supported by much better integration of planning and housing policies, with close monitoring of outcomes (paragraph 113).
(cc)It is clear that housing market renewal will take a long time and that new interventions will be required to start soon to prevent the problem of failing housing markets from getting worse. Continuing the recent small scale, piecemeal investment in houses and neighbourhoods without a large, long-term strategic approach, will result in more money being wasted (paragraphs 114 and 115).
(dd) As some inner urban areas become increasingly unattractive and residents continue to leave, the social and financial cost to the remaining residents, businesses and public services increases. Without Government investment in housing market renewal, these areas will become increasingly difficult and expensive to manage. We welcome the Department's commitment to make a submission for a Housing Market Renewal Fund as part of the Comprehensive Spending review. This must be treated as a priority by Government as a whole. Significant additional funding is needed alongside new strategies and powers, so that the target to turn around the incidence of low demand can be met (paragraph 118).
(ee)We recommend that the Government should seek notification of a new housing gap funding scheme to cover the period prior to the new European Regeneration Framework being agreed (paragraph 119).
(ff)We recognise the importance of good community involvement and planning as part of the development of any proposals for housing market renewal. Given the scale of the problem, consultation needs to recognise at the outset that change is required and that speed is of the essence so that it does not further delay the much needed regeneration of these areas. We recommend that consultation should take account of the needs of both existing and potential residents of an area, to ensure that the former enjoy the benefits of redevelopment through a "right to return," whilst also attracting working families and middle income groups to the area as well as increasing levels of owner occupation (paragraph 121).
Compulsory purchase, compensation and guarantees
(gg)We recommend that the new compulsory purchase legislation should include housing regeneration and renewal as one of the purposes for which compulsory purchase can be used. In housing regeneration areas, a masterplan should provide sufficient indication of end use to allow a CPO to be confirmed. We urge the Government to bring forward the legislation as a matter of priority. (Paragraph 123).
(hh)We welcome the proposed Housing Assistance Regulatory Reform Order, which is intended to give local authorities greater flexibility over compensation to people being relocated as part of a regeneration scheme. We recommend that the principle of a 'home for a home' be used to compensate owner occupiers subject to compulsory purchase, with sufficient compensation to allow them to move to a home in an area of their choice and that this should be included in the amendments to the CPO system proposed by the Government (paragraph 128).
(ii)We recommend that the DTLR, working with the Council of Mortgage Lenders and the Treasury, should undertake a full feasibility study into the financial, community and social costs and benefits of each of the options available for sharing the risk of housing market collapse. A simple solution would be for local authorities in areas of market weakness to underwrite the market with a guarantee to buy back the property at their valuation of it at the point at which the sale took place (paragraph 132).
Neighbourhoods 'at risk'
(jj)We recommend that through a conurbation-wide approach, the emphasis of Government interventions should be changed so that priority is given to both failing and 'at risk' neighbourhoods. A much greater emphasis on prevention by the Neighbourhood Renewal Unit could prevent decline and result in significant cost savings in the long term (paragraph 133).
(kk)A Housing Market Renewal Fund should contain sufficiently flexible powers and funding to allow local authorities to respond quickly, to prevent 'at risk' neighbourhoods from falling into decline (paragraph 134).
Managing change
(ll)We recommend that the Neighbourhood Renewal Unit should identify and promote good practice in managing change in those areas which are seeing dramatic decline and abandonment (paragraph 135).
Regional strategies
(mm)We recommend that Housing Corporation Regional Offices, Government Offices for the Regions and the Regional Development Agencies should develop formal working procedures to ensure that full and consistent account is taken of low demand, unpopular housing and failing housing markets in regional housing, planning and economic development strategies. The Government Offices for the Regions should take the lead in co-ordinating this and report on progress on an annual basis to the DTLR (paragraph 140).
(nn)There is a serious danger that RDAs under the auspices of the DTI are neglecting regeneration. The DTI and the DTLR should ensure that RDAs continue to give priority to sustainable development and the re-use of brownfield sites for housing. Proposals for inner urban areas need to include co-ordinated regeneration and economic development activities (paragraph 143).
(oo)PPG3 requires planners to prioritise the re-use of empty properties and the brownfield sites on which they stand, in preference to new building on greenfield sites and we are disappointed that this does not appear to be happening. Regional Planning Guidance must reflect PPG3, should include rigorous targets for the reduction of the vacancy rate and should use this to calculate whether any additional houses are needed (paragraph 147).
(pp)Government Regional Offices should in future hold information about the number of new planning permissions given each year. (Paragraph 149).
(qq)We recommend that Regional Planning Guidance should use a rigorous sequential approach to using brownfield sites before greenfield sites. Much higher targets for the re-use of brownfield sites should be set. In the North West and similar regions no new planning permissions should be granted for greenfield sites (paragraph 150).
(rr)Local councils must take account of the brownfield capacity elsewhere in the sub-region. We recommend that when Government Offices for the Regions review local authority development plans and Housing Investment Programme returns, they should require local authorities to provide evidence that full account has been taken of housing supply in other authorities in the sub-region (paragraph 152).
(ss)A successful approach to housing market renewal will include the development of new homes in an appropriate mix of sizes, types and tenures and must attract a range of people back into inner urban areas. It must not be undermined by greenfield development and Regional Planning Guidance should develop a sequential test that limits new house building on greenfield sites until the regeneration of the inner urban areas is substantially complete (paragraph 154).
(tt)Different solutions are required in different places, taking account of the circumstances facing the housing market in each conurbation and the need to manage change. The rules governing a Housing Market Renewal Fund must provide sufficient flexibility to take account of that diversity. Moreover, in each region, sub-region and conurbation clear leadership and policies are needed to ensure that a consistent, coherent approach is developed across Government strategies and initiatives. To address the problem of failing housing markets, the range of strategies, powers and funding described above are needed-one is not sufficient without the others (paragraph 155).

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