Memorandum by The Empty Homes Agency (EMP
EMPTY HOMES, WASTED SPACE AND REDUNDANT BUILDINGSTHIS
COUNTRY'S WASTED ASSET
The Empty Homes Agency (EHA) welcomes this inquiry
into empty homes by the Select Committee and the Committee's recognition
that this is an important issue. The EHA is an independent national
housing and campaign group established in 1992. Our objective
is to bring about, on a national scale, the re-use of empty homes
and other unused buildings, for re-housing those in need and to
meet the housing needs of this country.
The Agency has two main purposes that flow from
this objective, firstly to highlight the waste of empty homes
and wasted property in England and secondly to promote, devise
and, with others, to deliver solutions for bringing empty and
wasted homes and buildings back to use.
2. THE SCALE
According to the latest Government statistics,
as at 1 April 2000 at any one time there are in excess of 762,000
existing homes standing empty across England. Of these, the figures
show over 201,000 having been empty for a year or more, however
the Empty Homes Agency estimate that a closer approximation would
be nearer 250,000 for long term empties due to the under-reporting
by many local authorities. These properties represent a wasted
resource for the country, they blight local neighbourhoods attracting
crime, anti-social behaviour and vandalism, they deny a home to
those in need of accommodation and represent millions of pounds
of lost investment in the economy.
Add to this the potential for additional flats
and maisonettes in empty, wasted and under-utilised space currently
designated as retail, offices or other commercial uses in our
town centres and the number of potential homes rises to well in
excess of 500,000.
3. THE CONSEQUENCES
Blight and neighbourhood degeneration.
Crime and antisocial behaviour.
Pressure on existing housing stock:
lack of accommodation, especially affordable accommodation, across
significant areas of the country.
Increasing use of bed & breakfast
accommodation in many areas especially London.
Devaluation of surrounding properties.
Loss of over £75 million per
annum in council tax revenue to local authorities in England from
the discount given to long-term empty homes (calculated from HIP
return for properties empty for one year or more and the average
Council Tax for 2001-02).
Pressure on further Greenfield housing
4. WHY ARE
Lack of financial incentive for re-use/disincentive
or penalty for inaction.
Cost of refurbishment/repair.
Ignorance of the options available
on the part of many property ownerstwo thirds of all empty
properties are owned by individuals not professional housing or
Restrictive planning policies mitigating
against conversion or temporary re-use of redundant commercial
or other property.
Complicated funding procedures via
councils and/or RSLs.
Difficulty in obtaining empty property
grants due to lack of powers afforded to local authorities under
the Housing Grant Construction and Regeneration Act 1996 (Chp.
Fears of delays in relation to regeneration
schemes meaning that stock is decanted early and kept empty for
longer than is absolutely necessary.
Land banking/property speculation
by private investors.
Out of sightout of mind: this
is especially true when property may have been inherited from
a deceased or hospitalised relative and may be located far from
the remaining family.
Since 1997 the Labour Government has introduced
a number of separate policy initiatives that have had a positive
effect on tackling empty homes, these include:
PPG3 and the sequential approach
for planning future housing developments giving priority to the
re-use of empty buildings.
Time limiting the zero exemption
of council tax on properties undergoing repair to 12 months.
Greater consideration to tackling
empty homes in the annual Housing Investment Programme (HIP) assessment.
Revised guidance to Government departments
and other public bodies on the use of their empty stock.
Reduction of VAT charged on the cost
of refurbishing long-term empty homes and tax allowances for the
conversion of redundant space over shops.
In addition specific reference to the problems
and effects associated with empty homes have been made in recent
years in important Government publications such as the Lord Rogers
Urban task Force Report, the Housing Green Paper, the Urban and
Rural White Papers.
However, whilst the EHA has welcomed, indeed
had campaigned and lobbied specifically for many of these initiatives,
the Agency firmly believes that their overall effectiveness is
not being maximised by the continuing failure to pull all these
disparate policies together at local housing authority level under
the auspices of a Corporate Empty Property Strategy. There is
still too much fragmentation and policy failure at a local level
due to a lack of joined up thinking. Each of the policy initiatives
above are acted upon (or not) in most authorities by different
departments, planning, council tax, housing, developmentin
many cases operating independently. Less than two thirds of English
local authorities have what the EHA would describe as any sort
of corporate empty property strategy in place. Without the rigour
of a statutory duty to produce and maintain such a joined up strategy
at a local level, where delivery needs to be targeted, too often
these initiatives will fail to achieve their full potential.
6. SOME OF
No financial disincentive/penalty
for owners of long-term empty property who fail to bring them
back into productive use.
Lack of clear guidance from Government
requiring local planning authorities to include nature and extent
of empty homes in their area within any housing capacity study
when developing or updating local or unitary development plans.
No statutory requirement for local
authorities to have an empty property strategy therefore significant
range of activity/inactivity across the country.
Lack of clarity on the ability or
otherwise of councils to make use of council tax data for identifying
owners of empty homes.
Length of time taken to undertake
a CPO under current procedures (section 17 Housing Act 1985).
There is a need for a fast-track procedure for councils when pursuing
a CPO as part of a published corporate empty property strategy.
Complicated and often inappropriate Housing Corporation bidding
rules for Temporary Social Housing Grant (TSHG). This grant is
one of the key tools used to enable Registered Social Landlords
(RSLs) to acquire private sector empty homes for refurbishment.
Empty Property Strategiesempty homes
are a national problem where different manifestations require
different solutions but they do exist across the whole country
north and south in both urban and rural areas.
The problem of empty homes exists across the
whole country, in areas of high housing demand by their waste,
they deny people a home and increase development pressure on edge
of town and greenfield sites. In areas of low demand they create
areas of dereliction and decay attracting crime and anti-social
behaviour and devaluing surrounding properties. The pressures
and the possible solutions will vary from region to region, indeed
from neighbourhood to neighbourhood across England, however the
need for action and co-ordinated corporate empty property strategies
remains the same.
We are concerned that some bodies believe that
local authorities already have such a duty. However, this is not
the casethere is a duty upon councils to assess the condition
of the housing stock within their area, but not specifically to
draw up and implement a specific strategy for bringing empty homes
(across all tenures and sectors) back to use.
The Agency feels that this duty is at the core
of future sustainable development, and one that we would strongly
urge the Government to require councils to undertake. It would,
in our opinion, have widespread public and political support.
It will focus the attention of councils and can then, as a statutory
requirement, be tied in more closely with the general push towards
"best value" in services and activities undertaken by
EHA request to GovernmentThe
Agency believes a statutory requirement is still needed to ensure
every local authority addresses the issue in their own area.
An alternative option would be to
include consideration of empty homes within the requirements of
the Homelessness Bill currently before Parliament. The Empty Homes
Agency is supporting the amendment tabled by David Kidney MP that
would require local authorities to consider the nature and extent
of empty homes in their area and the potential role they could
play in meeting the accommodation requirements identified in their
statutorily required Homelessness Strategy.
Constructive use of informationthere
is currently confusion as to whether information on empty homes
and in particular the personal contact details of the owners can
be used by the collecting local authority for any purpose other
than the collection and administration of Council Tax under the1992
Local Government & Finance Act. The Data Protection Registrar
has supplied opinion to suggest that any such use as part of an
empty property strategy is not acceptable. However some local
authorities have obtained counsel's opinion indicating that under
the Local Government Act 2000 the general consent for councils
to pursue any policy to further the economic, social or environmental
well being of local residents takes precedent. The current confusion
is unhelpful and counterproductive. It is clearly nonsense for
such information not to be shared.
Whilst one can clearly understand concerns over
councils selling such information to double glazing firms or the
like, this does smack of significant un-joined up thinking. The
result is that even the best Empty Property Officer, dedicated
to tackling England's wasted homes, is having to operate effectively
with one hand tied behind their back when trying to deliver an
empty property strategy. One of the most crucial parts of any
strategy is actually identifying the owner of an empty property
and starting a dialogue with them (positive eg grant aid etc,
or negative eg CPO action as appropriate).
The EHA believes the majority of the public
believe that when information is supplied to one section of a
council it is available across all that council's areas of operation,
indeed the failure to share information is frequently cited as
one of the key criticism of councils and other public bodies and
EHA request to GovernmentClear
statement from DTLR that local authorities could and should use
data collected for council tax to assist in pursuing an empty
100 per cent council tax campaignthere
is currently no fiscal incentive to encourage owners to get homes
occupied. To retain a maximum 50 per cent charge for empty homes
sends out the message that it is cheaper to leave a home empty
than to get it occupied: "Keep it empty, don't make any attempt
to bring it back into use and society will give you a discount."
Such a message runs counter to the whole principal of sustainable
EHA request to GovernmentThe
Agency calls for a discretionary power for local authorities to
charge 100 per cent council tax on long term empties in their
Further discretion for each authority
to be able to set it own definition of what is long-term empty
in relation to their local housing market.
VATthe cost of repair remains a key issue
as to why homes stand empty, a key factor being VAT charged at
17½ per cent on refurbishing properties empty less than three
The Empty Homes Agency warmly welcomed the Government's
announcement in this years Budget of the reduction of VAT from
17½ per cent to 5 per cent on the cost of refurbishing residential
property that had been empty for three years or more. This extension
of the original proposal in the Pre-Budget Report of a zero VAT
rate for repairs to properties empty over 10 years came about
following extensive discussions between the EHA and HM Customs
& Excise. However these reductions do not provide the level
playing field in VAT terms in housing as new house building (especially
that taking place on Greenfield sites) remains zero-rated for
VAT. The EHA continues to call for harmonisation of VAT at 5 per
cent between new house building and refurbishment of existing
It has been said that a modest increase of 5
per cent on new house-building costs would not be acceptable to
the house-builders. It is important to note that we are talking
about 5 per cent on the build costs not a simple 5 per cent tax
on new house prices. A significant proportion of the cost of a
new house is determined by the cost of the land. Opposition to
tax is a reflex; it must be expected. Of more substance is the
justification for continued exemption. This is becoming difficult
to defend, especially when property and environmental interests
such as RICS, the Civic Trust, the Chartered Institute of Housing,
our Agency and the CPRE jointly agree that a modest increase of
5 per cent would not form a barrier to new-build provision. This
would particularly be the case if Government were to take on board
the fact that most house builders have a two-year land bank. Therefore
if it were felt necessary to minimise the short term effects,
VAT harmonisation could be introduced with a suitable lead in
time to allow house builders time to take into account the tax
in their new land appraisals.
A 5 per cent increase in VAT (a green field
levy) will not, however, save green fields when change of use
can turn farmland at £2,500 an acre to £300,000 an acre
in value. To tackle our wasted homes, and potential homes, the
playing field must be levelled and refurbishment and conversion
harmonised at 5 per cent. This would also engage the interests
and talents of our house-builders in this activity. The lack of
profit arising from the present regime encourages them to walk
away from this activity.
Pleased as we were with the Government's new
VAT reductions announced in the Budget, the Agency estimates that
these new provisions still only relate to 60 per cent of England's
long term empty homes (those properties empty for a year or more).
|Properties empty 1-3 years
|Properties empty 3-5 years||approximately
|Properties empty 5-10 years||approximately
|Properties empty over 10 years||approximately
These figures have been corroborated by information received
from local authorities that have carried out specific analysis
of council tax or other data sources:
For example Birmingham City Council have recently undertaken
a ward by ward analysis of their council tax data which reveals
|As at November 2000||
|Homes empty 1-2 years||2,823
||45%||of those empty 1 year or more
|Homes empty 2-10 years||3,849
||55%||of those empty 1 year or more
|Homes empty 10 years or more||6
||0.09%||of those empty 1 year or more
Across England there is approximately a further 500,000 homes
that have been empty for up to one year many of which may require
some refurbishment or repair before their re-use. The EHA believes
that reducing the cost and therefore increasing the likelihood
that such repairs will be carried out will help to avoid many
of these "transitional" empty homes standing void for
significant periods of time and therefore risk becoming the problem
long-term empties of the future.
EHA request to GovernmentThe Agency continues
to support the harmonisation between new build and refurbishment
at 5 per cent. Indeed an additional proposal for a reduced rate
of 5 per cent VAT on all repairs and maintenance work to all residential
properties whether empty or occupied.
The planning system and capacity buildingRegional
Planning Guidance (RPG), Structure Plans and Local Plans are often
not taking into account the nature and extent of empty homes when
establishing house-building targets. This is despite a clear instruction
in Government guidance stating that existing empty homes should
be considered along with the potential offered by flats over shops
etc. when establishing new housing targets. The reality on the
ground is that empty homes are not being seen as a potential housing
resource which clearly runs counter to the Government's overall
emphasis on sustainable development. For example the recently
announced North West RPG they actually increased the housing requirement
for the region by 5 per cent because they wanted to include a
5 per cent vacancy rate build into the overall figure! (As at
April 2000 the void rate in this region was 4.6 per cent the joint
highest in the country)
EHA request to GovernmentClear instructions
to the Planning Inspectorate and Regional Planning bodies on the
positive part to be played by empty homes in facilitating future
housing need and further monitoring of future plans to ensure
the existing guidance is being adhered to.
Private Property InvestmentCurrently private investors
will buy up empty properties only to sit on them in anticipation
of a rise in the market. These frequently stand empty for more
than a year and the owner has no intention of bringing them back
into use ahead of their own schedule.
EHA request to GovernmentA tax on the capital
appreciation of any property other than the owner's main residence
where that property has remained empty for more than six months.
A positive tax incentive and relaxation of current
taxation on rental income to encourage "buy to let"
investors and potential landlords.
Publicly owned empty property.
The Empty Homes Agency supports the initiatives currently
being taken by the MoD, Highways Agency and others to seek to
tackle their empty homes. This is something that is certainly
required as the Government regrettably retains the title of England's
most wasteful landlord with a void rate some four times higher
than that even in the private sector and up to six times worse
than many local authorities.
EHA request to GovernmentRevised and strengthened
guidance to be issued to all Government departments and agencies,
including the NHS, on making best use of their empty homes.
This will need to be accompanied by a review of
current Treasury regulations on securing market returns on the
sale or lease of public property and assets which can mitigate
against successful short-term reuse of properties especially for
social housing purposes in partnerships with councils and RSLs.
The Empty Homes Agency welcomes the Transport, Local Government
and the Regions Select Committee inquiry into empty homes. We
are particularly pleased at the broad range and scope of the inquiry,
in our opinion this highlights the far reaching effects of long
term empty homes and wasted buildings on society today, as well
as looking at the often diverse factors leading to the issue arising
across the country.
The EHA have set out in this memorandum of evidence a brief
summary of some of the key points we believe the Committee could
focus upon and where support from the Select Committee would,
we believe, help to bring forward further positive policies and
actions from the Government. We would welcome the opportunity
to discuss these points further with the Committee.
The Empty Homes Agency