Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by Hyndburn Borough Council (EMP 24)



  The Council feels that there is a link between unwanted empty homes and other properties and the decline of areas of housing, although we have nothing but circumstantial evidence and experience to prove this. Resident's feel threatened by empty properties, even whilst they are still not very apparent and, in reasonable condition, but once they become obviously derelict or subject to vandalism and unauthorised access, then local communities can start to experience negative feelings about the whole of a neighbourhood or area.

  There is also a more potent effect on non-residents passing through the area. Such areas rapidly gain notoriety as "derelict" or declining, and potential buyers are deterred from even expressing an interest in properties.

Benefits of Reducing the Level of Empty Properties

  The benefits of bringing properties back into use are several. As well as the benefit in terms of an increased amount of accommodation, there is a major effect on the environment of the immediate neighbourhood, of bringing properties back into beneficial use. Usually, the standard of external repair and appearance of occupied properties is better and this can have a dramatic effect on a locality and public confidence in it, although in some areas the decline has reached such a stage that recovery is unlikely without wholesale regeneration.

Why are so many homes empty?

  In North-east Lancashire there are a number of factors;

    1.  A reducing population.

    2.  The limiting level of owner occupation—Older family members cannot leave their property to another member of the family as a home, as all other family members are owner-occupiers in their own right. Whatever happens there is potential for a property to be left empty.

    3.  Contraction in the private rented sector—The deregulation of the private rented sector in the late 1980's lead to a marked increase in the number of houses held for private letting. In the late 1990's there has been a shortage of tenants, and thus many properties have been left empty.

Effectiveness of Government Policy to Date

  The situation in Hyndburn is such that the two major initiatives by the Government—reduced VAT on long-term empties and the exemption from stamp duty—are not really relevant and therefore we cannot comment from experience.

  Beyond that the principal problems concern the ability of the Council to trace the owners and other interested parties, of empty stock. Although the land registry may have names, often the address information is out of date.

  If we are unable to find an owner, it becomes a long and potentially risky affair for the Council to take effective action—usually compulsory purchase or clearance. It would be of great assistance if a simplified and streamlined procedure could be made available.

  The capital cost of some of these actions is also a problem where an authority is facing a great demand for assistance from a number of sources.

Additional Measures

  Council Tax 1—The ability of the Local Authority to charge 100 per cent Council Tax would act as an incentive for owners not to buy properties that they did not intend to use. It might well be that an initial period of being empty is allowed, but this has to be carefully judged to prevent abuse.

  Council Tax 2—As a bigger incentive to at least keep their empty properties in decent order, perhaps a Council Tax multiplier should be considered which might be abated if the property remained in reasonable condition.

  VAT 1—The recent changes to VAT are difficult to work out and in Hyndburn have had minimal effect. In theory it might be worth someone keeping a property empty for longer to obtain the VAT exemption. Our experience would be that it is off neutral effect, but might be left available as a tool to be used in appropriate circumstances. Overall, we do not feel that this type of change would have a beneficial effect.

  VAT 2—Consideration should be given to harmonisation of VAT on new-build and renovation work. This would make renovation relatively more attractive economically.

  Compulsory Purchase.—This is often needed to finally deal with an empty property, either by purchase for future use, say by an RSL or via a "homesteading" type scheme, or for clearance. Apart from the cost of the compensation, the main problem is where an owner cannot be traced making initiation of proceedings more prolonged. If this area was addressed then together with increasing experience within Local Authorities and the circulation of Good Practice by the Government, compulsory purchase would be a more effective tool. It has to be remembered however, that compulsory purchase for continued use of properties that are not likely to attract tenants or occupiers is pointless.

  A Variation on a Repairs Notices—What would be a very useful tool in limiting the negative effects of empty properties on the decline of an area, would be a variation on the repairs notice, where the elements considered would include the appearance of the building, the method of securing it, to avoid unsightly boarding, and the condition of the gardens or yards. The present repairs notice is primarily linked to the fitness standard and quite rightly ignores purely aesthetic issues, but often it is the appearance of the empty property that is the problem. A power for the Council to enforce a reasonable level of appearance would be beneficial. Whilst the Council does have powers to deal with dilapidated buildings, properties can be seriously detrimental before they are in such a state as to be derelict and come within this legislation.

  A Statutory Empty Properties Strategy—Such a duty is not bound to lead to Local Authorities tackling the problem. Anyone can write a strategy, delivering on it is a different story. This would benefit those Local Authorities who have sufficient manpower to write a strategy and be prejudicial to the smaller authorities who wish to spend time tackling the problem rather than preparing glossy strategies.

  Reuse of existing properties versus New-Build—There is a clash of priorities here! Whilst, it is felt that regional planning guidance should take into account the level of empty properties that are, or can be made suitable for use, it must be borne in mind that there is a considerable desire amongst the public for new houses. This is because of a number of reasons including easier access to finance, better starting deals and the reasonable expectation of not having large repair bills in the first few years. Estate layout and better car-parking and garden provision are also important. There is also a reaction against buying in what are perceived as run-down areas with "social" problems.

  Therefore, the Council feels that Regional Planning Guidance should take more into account, the level of empty stock available, allowing for its condition, in setting targets for new homes. Local Authorities should be able to refuse approvals for new-build schemes that will cause a deleterious effect in the area, or as an interesting alternative, possibly builders might be required to contribute to the costs of removing surplus stock created by the building of new houses.

  Finally, it should however, be realised that over a longer period of time, 10 years or so, there should be some replacement of older housing by new, simply to keep the average age of the stock from increasing continuously.

What can the Public Authorities do about properties they own

  The key issues for publicly owned stock is that they are used if there is a demand, and demolished and taken out of the stock if they are not needed. If properties are being mothballed for future use then they should be kept in a reasonable condition particularly as regards appearance.

Specific Steps to be taken

  Development Control—The Council feels that there needs to be a clarification of planning policy to allow a greater degree of discretion to the local planning authority to judge whether or not the overall effect of a particular new build scheme would be so detrimental to the overall housing situation, that it should be refused.

  This must extend to the structure plan and local plans.

  In taking these steps, justification must be sought otherwise a NIMBY approach might result, but due consideration has to be given to preventing the wholesale decline of areas of houses and other building, when the ultimate costs will be borne mainly by the public purse.

  In conclusion in overall terms too many new houses are being provided without thought for the consequences!

  It follows from this that the Government Offices for the Regions should be more vigorous in ensuring that planning policy is meeting the needs of the community, and in supporting that policy.

Regeneration Initiatives—Effects on Empty Properties

  Regeneration initiatives can adequately tackle the condition of empty properties, but need to address the desirability of that property from the point of view of a potential occupier or owner. Often, potential occupiers are put off by the relative attractiveness of properties in other localities. Therefore simply getting empty properties repaired is not necessarily a solution, they must be capable of attracting occupiers.

  The opposite, where there is an attempt at regeneration without addressing the condition of empty properties is not likely to succeed.

Excessive Building of New Homes for Rent

  This is a complex point. Whether or not this is true depends upon the target group for the newly built houses, and whether or not the "empty" stock in that locality might attract the target group if there was no new-build available. If the two sectors are not competing for occupiers, if they are aimed at different groups, then there might be no cross-linking effect, on the other hand, if the target groups are the same, as often might be the case, the newly built premises are likely to result in a higher level of vacancy in the older stock. New build of publicly supported stock for rent or for sale for that mater, should be carefully thought out to avoid major deleterious effects on older housing.

Demolition of surplus stock

  If there is a need to reduce the surplus of housing, it makes sense to remove those in the worst condition and in the least desired areas. Clearance of surplus stock is the only practical solution unless property is to be moth-balled for future use, with all the consequent risks.

Accredited List of Landlords

  We do not feel that such a move would affect the situation.

Negative Equity

  "Negative equity" is a problem only when an owner has to sell the property. In the case of forced sales such a displacement by clearance, then the owner should be entitled to transfer their equity or lack of it to a new dwelling. The lender is no worse off than they were before. If commercial lenders do not wish to participate, effectively by not lending in areas that might conceivable suffer, then Local Authorities should be allowed to lend instead. Should an attitude on the part of commercial lenders, would indicate that they have no role to play in urban regeneration except in purely favourable circumstances.

J. D. Hickinbottom

Urban Renewal Manager

Housing Services

September 2001

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Prepared 24 October 2001