Memorandum by the Urban Regeneration Officers
Group (EMP 66)
EMPTY HOMES: STRATEGIC CONTEXT AND MECHANISMS
Local Government Housing Strategists have a
complex context within which to work.
Regional Planning Guidance
Regional Housing Overview
Sub-regional or Conurbation level
Unitary Development Plans
Local Housing Strategies and Housing
Revenue Account Business Plans
Local Regeneration Plans and Strategies
Local Strategic Partnerships and
Local Community Priorities and requests
Local Housing Strategists need pragmatic and
flexible mechanisms with which they can combat the problems of
empty homes in all tenures. This submission aims to draw the Select
Committee's attention to potential mechanisms for change and current
barriers to achieving this. An Empty Homes Strategy which sets
the parameters for the local authority concerned, but is consistent
with both the Regional Housing Overview and Regional Planning
Guidance, should be a fundamental part of the strategies listed
Regardless of tenure homes can be empty for
a number of reasons:
Simple transactional voids as a previous
occupier moves out and the new occupier moves in
The need to carry out extensive remedial
works which would be a health and safety risk if the occupiers
remained in situ
The dwelling is unfit to live in
The dwelling by nature of its age,
location, local social circumstances or built form is obsolescent
ie there is no appreciable demand for anyone to occupy the property
This paper concentrates on the latter two of
DTLR are developing detailed guidance in anticipation
of the proposed Regulatory Reform Order on Private Sector Housing
Renewal. There is concern that the guidance may consider the renewal
of homes rather than the removal of obsolescent and unfit dwellings.
The key issue is that the two processes must be considered together.
Housing Revenue Account Business Plans are a
key factor in determining future investment and strategy with
regard to Council Owned dwellings and the opportunities to reach
the Decent Homes Standard.
A parallel mechanism for Private Sector Stock
would aid both financial and regeneration planning. Local Authorities
as part of the development local policies for Private Sector Renewal
might therefore be required to develop say a 30-year "Business
Plan" or "Investment Plan" for the Private Sector
Stock in their Borough. A specific but affordable target to renovate
stock and reduce obsolescence could be set in the context of the
current spending targets and the options for funding private housing
could be reviewed and enumerated. This could aid the process for
re-using viable empty dwellings and clearing obsolescent dwellings.
Coupled with local Private Sector Stock Condition Surveys and
the English House Condition Survey this could give Central and
Local Government the opportunity to measure the cost of regeneration
of stock and plan future spending in light of this.
An example based on a real situation:
Mrs Smith lives in Brown Street. Over the last
five years all her neighbours have moved out because of a combination
of crime, poor private landlord management, economic collapse
and other social factors. Hers is the only occupied house in a
street of 30 properties. She bought her house for £30,000
10 years ago and has paid £20,000 off her mortgage. Because
the local housing market has collapsed even if she wanted to sell
her home no-one wants to buy properties in her street and no-one
is particularly interested in her old two up-two down terraced
house. Her house could be bought by the Council for Clearance
for around £7,000, leaving her with nowhere to live and a
debt of £10,000 which her Home Loss and Disturbance Allowance
will only help to reduce a little. A relocation grant will help
her buy a new home but she would still have a massive mortgage
debtso she can reject that as an option. She likes being
an owner-occupier, her house is a "little palace" but
the Council wants to clear her street because after a most satisfactory
course of action study it can see no other option than demolition.
How can we help her to move? She is 58 and thinking of retiring
soon and does not want any more debt.
Local Authorities have general powers under
the 1985 Housing Act and subsequent Secretary of State consent
to acquire dwellings and then sell, with a discount of up to 30
per cent, to people who have been subject to Slum Clearance. So
the Council can buy a house for Mrs Brown, renovate it if it needs
it, and then sell it to her in part exchange for her old house.
The trouble is she will still be in negative equity on her old
house and the council is "out of pocket" on the transaction
and will have to place a land charge on her new home. Her lender
has to agree to move her mortgage over. The value of her new home
is slightly higher but nowhere near the values when she bought
it so she is still in negative equity but not as bad. The cost
of moving Mrs Brown, clearing her obsolescent home, and buying
the new one to sell to her will have to be met from somewhere.
There is a mechanism to help but the sums do not add up. If we
help her is this effective use of public money? Is this the cost
of regeneration and reduction of empty homes? How can we help
people who are simply trapped because of circumstances beyond
A key aid to this process would be to work with
the Mortgage Lending industry to establish how we might:-
(a) Prevent repossession and abandonment
leading to empty homes.
(b) Introduce flexible mortgage packages
that allow a mortgage to be transferred to an empty viable home
from an obsolescent one.
I would suggest that Local Strategic Partnerships
or Regional Housing Bodies could work with the lending industry
to set up local intelligence sharing networks. At the moment the
only productive way to engage the industry is nationally through
the Council of Mortgage Lenders. Once that first contact is made
it is easier to meet with senior officers from the companies and
introduce new concepts and mechanisms. Approaching the local branch
manager of your high street store usually results in frustration
as he/she is operating to a tight set of rules set by Head Office
and has not got the authority to be flexible with products.
Another approach would be to establish more
robust mechanisms for Local Financial Institutions/Community Based
Financial Institutions so allow them powers to assist local people
in clearing debt and regularising their housing situation.
Although on paper there are a range of powers
to allow Local Authorities to acquire properties for the purpose
of clearance detailed reading of the legislation reveals a number
of impassable hurdles that prevent the purchase of a dwelling
if the owner does not want to sell. In areas of high numbers of
empty homes, where for example a speculator has acquired a portfolio
of dwellings and has failed to develop them, Compulsory Purchase
is usually the only remedy to allow acquisition for clearance.
If you do not have the ability to go to the CPO process the only
other alternative is to pay the asking price to facilitate clearance.
This is likely to be a huge call on the public purse.
Despite a review of Clearance Powers and the
promise of a detailed guidance manual the position remains that
there is not a modern process in law that addresses the need to
acquire obsolescent dwellings from unwilling sellers. Authorities
therefore have no alternative but to try to use available powers
in imaginative ways that can lead to a high risk of CPO's failing
for procedural and technical reasons if challenged.
The proposed solution is to modernise the clearance
process so that those residents/owners who need to be legitimately
compensated for the loss of their property would continue to be
covered by current rules. However a new power specifically aimed
at dealing with obsolescent and empty housing needs to be introduced
and current compensation arrangements need to be reviewed to ensure
that they are flexible enough to ensure appropriate payments based
on the performance of the owner in managing and maintaining the
Although all owners affected by a CPO would
still be covered by the existing provisions based on Open Market
Value, new powers should be introduced to allow Local Authorities
to deal flexibly with residents and home owners in order to meet
their housing needs in a way that is equitable, reflects the full
circumstances of each case and recognises the fundamental difference
between a home owner (resident or absentee) and an investor.
Many empty homes are owned by private landlords
who due to the current housing market in their area, for reasons
of their own, or through sheer bad management fail to let their
A combination of supportive and punitive powers
is required to assist, or enforce against Landlords with empty
Landlord Accreditation by nature is a voluntary
process with those landlords who are generally good at managing
their stock being more likely to participate than amateur, bad
or criminal landlords. Local Housing Regeneration Policies should
aim to develop Landlord Accreditation processes that contain a
Code of Conduct for the management of dwellings. Councils should
have general policies that aim to support and develop professionalism
in private landlords.
However there are a range of amateur, bad and
criminal landlords who will not have either the time or the inclination
to take on board a professional approach to managing their dwellings.
Licensing of these landlords would be a useful tool to oblige
them to do something practical with their empty dwellings. A license
would require a landlord to arrange for the active and professional
management of their properties or face a range of punitive measures
up to and including the compulsory purchase of that dwelling.
A professional landlord/registered social landlord could take
over ownership of that dwelling and facilitate re-letting, or
the Local Authority could re-market the dwelling for Home Ownership.
In addition, if Local Authorities do want to
be able to CPO these properties, they should be able to demolish
if appropriate and not be obliged to bring them back into use
as with existing powers.
In areas where HAs/RSLs own empty properties
which are part of a wider regeneration scheme, guidance and a
funding mechanism is required on how the cost of renovation or
demolition can be funded. Current Indicators that determine the
allocation of resources to Local Authority regions from the Housing
Corporation recognise empty homes as a supply and assume that
the property can be let. This results in those areas with high
levels of obsolescent HA/RSL void properties receiving a comparatively
smaller allocation of resources. General government guidance on
the use of resources indicates that Housing Capital intended for
Private Sector Renewal should not generally be used for demolition
of HA/RSL property. Conversely Housing Corporation guidance indicates
that resources should be used for renovation or new build. There
is therefore a funding gap in the strategic approach to removing
obsolescent empty homes. A fund that allows the purchase of redundant
HA/RSL stock is vital to achieve action against empty homes.
This is also problematic in that these types
of properties are generally scattered throughout areas and do
not form a coherent mass. In trying to develop an area of empty
homes one often finds a range of different ownership's in any
one street. Mechanisms that facilitate the easy acquisition of
stock owned by different tenures are required. A simple acquisition
process through Clearance powers would address this.
Development Control Officers are not currently
required to take account of the Housing Market within their borough
when considering a planning application for additional residential
If as part of a robust Housing Strategy it could
be proved that the provision of additional accommodation could
be detrimental to the overall balance of the Housing Market then
Development Control officers ought to be able to use this as a
material reason for refusing a Planning Application.
For example a speculative developer wishes to
construct purpose built accommodation for rent for elderly people
in a borough where a detailed Housing Market Study has demonstrated
there is also a significant over-supply of such accommodation
and demographic trends indicate the problem will worsen. In this
case both advice to the developer and the refusal of the Planning
Permission should be a key part of the process.
In addition guidance (through a PPG) making
it a requirement for planners to show that they have taken full
account of Housing and Regeneration strategies, and the Housing
Market in their borough in the preparation of UDP's and supplementary
planning guidance would assist this process. This would in turn
influence planning decisions.
8 October 2001