Memorandum by The Chartered Institute
of Housing (EMP 42)
Dealing with the problem of empty homes is part
of a local authority's strategic role, as prescribed in the Housing
Green Paper (April 2000). The CIH supports the broad thrust of
the proposals for the strategic role in the Housing Green Paper,
but believes that they do not go far enough. CIH calls for:
a clearer legal basis for the strategic
support for local authorities to
enable them to influence and shape local housing markets.
1. WHAT ARE
1.1 An empty home can contribute to the
deterioration of an area's environment. Its condition can decline,
creating a statutory nuisance and attracting crime to the area.
Empty homes become the equivalent of "bad teeth" in
a neighbourhood, particularly when they are large properties or
in prominent locations such as corner sites.
1.2 Large numbers of empty properties within
an area can attract a wide range of crime eg storage of stolen
goods, drug dealing and usage, arson.
1.3 Local services eg retail and transport,
can close down due to lack of support and custom.
1.4 In areas with a widespread empty homes
problem, turnover in schools influences education and school quality,
often exacerbating problems of truancy and exclusion. Children
and young people alienated from school form a major factor in
neighbourhood crime, vandalism and anti-social behaviour.
2. WHAT BENEFITS
2.1 In addition to the converse of the effects
stated in Part 1, an effective empty property strategy in a high
demand area can lead to the acquisition of vacant properties to
increase the supply of affordable housing.
3. WHY ARE
3.1 During the past 30 years there has been
very little demolition of residential property, and the emphasis
has been on renovation and refurbishment. Economic and social
structures have changed greatly since the 1960s; housing stock
in many parts of the U.K. no longer meets modern-day needs in
terms of property type and location.
3.2 Low Demand Areas
The Chartered Institute of Housing supports
the findings of the Centre for Urban and Regional Studies (Changing
Housing Markets and Urban Regeneration in the M62 Corridor) that
the causes of empty homes are as follows:
Changes in the private house buying
sector. The liberalisation of housing finance in the mid 1980s
has led to the proliferation of inexpensive home ownership schemes,
making owner-occupation accessible to those on comparatively low
Changing aspirations for housing,
together with the obsolescence of certain types of dwelling eg
pre-1919 terraced housing. Buyers often no longer want terraced
housing, preferring new -build peripheral site developments. Research
by CURS has discovered that inner city housing markets are often
supported by ethnic minority communities who wish to live close
to their cultural facilities. However, the research has also found
that younger members of these communities often aspire to leave
Economic restructuring and labour
market change. The loss of jobs in the Midlands and North of England
has been accompanied by decentralisation of employment. Planning
regimes in the 1980s favoured economic development in peripheral
Demographic changes, with falling
birthrates and outward migration;
Lack of collaboration on planning
between local authorities, and a lack of understanding of cross-boundary
housing markets. The result is that new housing can be constructed
on greenfield sites close to areas of sound but unoccupied housing;
Decline in the use of Compulsory
Purchase Orders, which are a crucial part of an empty property
strategy. Widespread use of CPOs for area clearance was made in
the 1960s and 1970s. Their use has declined for a number of reasons:
lack of money and expertise;
registered social landlords have
been much less willing to buy/rehabilitate empty properties since
1988 because of lower grant rates (linked to the introduction
of private finance);
poor image of CPOs, linked to
the housing policies of 1960s and 1970s;
able to fit within the Housing Corporation's annual funding cycle.
3.3 Individual Empty Properties
Individual empty properties may be located within
an otherwise fully occupied neighbourhood. They are empty because
of the circumstances of the individual or household who owns them;
they are not empty because of any area-based economic or environmental
reason. Examples of reasons:
an owner has moved into a residential
home and does not wish to sell;
an owner bought a property as an
investment to renovate and refurbish, but no longer has the funds
to do this;
a property has progressively declined
and is in extremely poor condition with outdated facilities;
a property has been purchased as
an investment and held for future use by members of the owners'
the title to the property is disputed
eg after death or divorce.
Bringing empty homes back into use can involve
an intense amount of work in return for acquiring a comparatively
small number of properties. Problems include:
there is no economy of scale;
there can be complex legal problems,
with specialist knowledge required;
there are particular problems in
high demand areas, where even properties in poor condition can
be very expensive for registered social landlords to purchase;
it can be difficult to gain accurate
information about empty homes, with Data Protection used as a
reasons for obstructing the flow of information eg Council Tax
3.4 Unpopular Social Housing
Unpopular social housing is difficult to let
either because of its property type or location. Examples of unpopular
property types, to be found in both high demand and low demand
accommodation reserved solely for
elderly people, consisting mainly of bedsit and one bedroom flats
and bungalows, plus the older style sheltered housing schemes.
Preferences have changed since the 1960s when a considerable amount
of this accommodation was built. Today, Care and Repair schemes
and Home Improvement Agencies ensure that elderly people are able
to continue living in their existing homes. Even if they wish
to move, they frequently request at least two bedrooms for visitors
and storage of possessions.
a large amount of one bedroom accommodation
which was built in the 1960s. Aspirations have changed, and smaller
accommodation is often incompatible with modern lifestyles.
poorly designed estates which can
yield a large amount of unpopular housing, management and social
problems, crime, lack of security and high turnover. Within areas
which are generally prosperous, including the South of England,
regeneration funding is often not available to re-model these
estates, and HNI and GNI indices are not often structured to address
these issues with central funding.
4. WHAT HAS
The statistics collated by the Empty Homes Agency
for April 2000 show that government policy has yet to stimulate
a reduction in the number of empty properties, in both the public
and the private sector.
The Government's proposals for changes to VAT
included in the March 2001 budget are very welcome, together with
the 100 per cent capital allowances for the conversion or renovation
of space over shops. However, further concessions are required:
Greenfield development still incurs
no VAT, which makes it a more favourable option than refurbishment
of existing housing. This is incompatible with the principles
of Planning Policy Guidance 3. CIH favours the harmonisation of
VAT, with 5 per cent charged on both greenfield development and
renovation and refurbishment schemes.
The changes in VAT rates announced
in the Budget 2001 may create a perverse incentive for owners
of properties to leave them empty for up to three years; after
this period the VAT rate will drop to 5 per cent and make renovation
cheaper. The VAT rate on renovating empty properties should automatically
be 5 per cent.
The 2001 Budget proposed that the
full amount of VAT payable on the costs of renovating accommodation
which has been empty for at least 10 years should be reclaimable
once the property has been sold on. CIH proposes that this VAT
relief should be available for properties which have been empty
for less than 10 years.
5. WHAT ADDITIONAL
5.1 Council TaxCIH welcomes the Government's
proposals for abolishing the 50 per cent discount on second and
empty homes; this is a measure which can be used to enforce the
work of Empty Property Officers. An additional incentive to re-use
empty property would be an ascending scale of Council Tax beyond
the full rate, which could be progressively imposed for each 12
month period during which a property is left empty.
5.2 Empty Property StrategiesEach
local authority should have a statutory duty to assess the incidence
of empty property (in all tenures) within their area, with a report
included within their Housing Strategy Statement. The DTLR must
provide guidance on the point at which a local authority can be
said to have "an empty home problem" which requires
a full empty property strategy, eg the number or percentage of
the total stock within their area (this is especially useful to
authorities which have lots of individual empty properties, as
opposed to a higher-profile area-based problem).
5.3 The Regional dimensionCIH agrees
with the Recommendation 6 within Policy Action Team 7's report
Unpopular Housing, that Regional Planning Bodies should formulate
plans linking with Regional Development Agencies in respect of
overall household numbers and the appropriate mix of dwellings,
and support a sequential approach to priority area strategies.
Reducing the problem of low demand housing should be made a requirement
of Regional Development Agencies; this will help to ensure that
RDAs take responsibility for both economic development and community
5.4 Compulsory Purchase OrdersLocal
authorities do not have sufficient powers to deal with areas where
the housing market has collapsed or is very fragile. There is
no power to compulsorily purchase properties which are obsolete/surplus
to requirement but not unfit.
The current system of CPOs is long, complicated
and outdated. This process should be easier and shorter, and CPO
powers need to be revamped to reflect current policies/needs.
The CIH recommends the following:
New CPO legislation should be drafted
to consolidate and simplify the existing law, and use up-to-date
The existing powers are too dispersed
and should be covered by a more general Local Government Act power
covering all the likely purposes of a CPO;
The powers should be extended to
include a category of "obsolescence" as a criterion
for compulsory acquisition;
Good practice on CPOs should be widely
disseminated. Delays are caused by the legal and procedural complexity
of the process. CPOs rely on too many other things falling into
place, especially the granting of planning permission. Some local
authorities have found ways of telescoping the process so that
necessary steps overlap, rather than taken in sequence, thus helping
to speed up the process;
There is a case for assisting those
who have negative equity and whose homes need to be acquired to
deal with low demand and surplus housing.
6. WHAT CAN
THE NHS, LOCAL
6.1 The Housing Corporation's funding systems
need to be more sensitive to the principles of Planning Policy
Guidance 3, whereby existing buildings should be used before greenfield
development is undertaken. Total Cost Indicators need to be adjusted
6.2 RSLs need to take a more active role
in adapting and renovating existing social housing. To encourage
re-use of existing properties, this type of scheme could attract
a higher proportion of Social Housing Grant than new build schemes.
6.3 Local authorities should have a statutory
duty to carry out an annual assessment of unpopular social housing
within their area, detailing numbers, types and reasons for unpopularity.
(Suggested definition of unpopular social housing: properties
vacant for more than 12 weeks).
6.4 Local authorities should have a duty
to assess the current and future needs for special needs housing
within their area, both overall and within client groups. This
assessment should then be included within their Housing Strategy
Statement. This is particularly relevant in areas where there
is an oversupply of elderly person's accommodation and under-supply
for other client groups. Local authorities should devise plans
for addressing this imbalance.
6.5 For RSLsEnterprise Zones could
be created by the Housing Corporation to support and encourage
RSLs to develop new alliances and structures. Within these zones,
there could be variations in rents and service packages offered,
and greater flexibility in allocation of stock to widen the client
group eg shorthold tenancies.
6.6 RSLs should have effective asset management
strategies to ensure that they are not contributing to an area's
decline. This should be monitored by the Housing Corporation.
6.7 RSLs which have a small amount of stock
in a neighbourhood remote from other parts of the stock tend to
have worse void levels and are less able to provide the necessary
level of service. RSLs need to be encouraged to transfer or sell
stock to other RSLs better placed to give them the management
and attention required.
6.8 Restrictions should be lifted on using
Social Housing Grant to fund major repairs and improvements, and
for the development of asset management strategies, including
the cost of demolition.
6.9 The objectives of the Approved Development
Plan should be amended to emphasise the role of RSLs in supporting
the sustainability of communities.
7. WHAT SPECIFIC
7.1 A Housing Market Restructuring Fund
should be introduced to finance the long-term strategies in the
areas worst affected by change. The fund will facilitate:
a programme of refurbishment, new
build and selective demolition in areas where the housing market
the land assembly necessary for redevelopment.
A separate fund is needed, since the long-term
work of tackling low demand cannot be fitted into the annual funding
cycles such as the Approved Development Plan and the Housing Investment
Programme. Also, the areas affected may not be confined within
the boundaries of one local authority.
Local authorities should not have to compete
in bidding for finance from the Housing Market Restructuring fund.
Research should be carried out to identify the areas worst affected
by low demand. The allocation mechanism for the funding should
be similar to that used for the Neighbourhood Renewal Fund.
The fund should be targeted at failing housing
markets, rather than local authority areas. This should encourage
inter-authority co-operation. A more accurate parameter for the
targeting of the fund could be postcode areas; these tend to be
more flexible and reflective of housing market areas than local
7.2 A more formal sub-regional working arrangement
needs to be developed between housing and planning professionals,
so that knowledge of local housing markets can inform the Plan,
Monitor and Manage approach being adopted to monitor the implementation
of Regional Planning Guidance. The CIH agrees with the report
of Policy Action Team 7 (Unpopular Housing) that Regional Planning
Bodies should monitor the implementation of the housing requirements
set out in Regional Planning Guidance, in order to ensure that
housing provision targets are not exceeded in regions where there
is low demand for housing.
7.3 Local partnerships involving local authorities,
RSLs and developers should develop a collaborative strategy for
their local housing market, which integrates investment decisions
and ensures that the actions of individual organisations are consistent
with the overall strategy.
7.4 CIH agrees with the report of Policy
Action Team 7 (Unpopular Housing) that advice on non-renewal of
outstanding planning permissions in Planning Policy 3 should be
amended to include evidence of changes in demand and supply as
reason to review critically all applications to renew planning
7.5 Investigation of empty homes is included
in the guidance for Urban Capacity Studies. Urban Capacity studies
represent a proactive approach to Planning which can be at odds
with the more reactive approach taken by a number of local authority
Planning departments. Any future Planning legislation should aim
to alter the culture of the profession and ensure that a proactive
approach is part of its core business.
Nevin B, Lee P, Goodson L, Muire A, Phillimore
J (2001) Changing Housing Markets and Urban Regeneration in
the M62 Corridor, Birmingham.
DETR (1999), Unpopular Housing: Report by
the Unpopular Housing Action Team, DETR: London.
HACAS Consulting and the Chartered Institute
of Housing (2000) Sustaining Success: Registered Social Landlords,
Financial Risk and Low Demand, CIH: Coventry.
Holmes A, Simpson M, (1999) Low Demandseparating
Fact from Fiction, CIH: Coventry.
CIH/LGA Briefing (2001), Modernising the
Legal Basis for Local Authorities's Strategic Housing Role, CIH: