Select Committee on Transport, Local Government and the Regions Minutes of Evidence


Examination of Witnesses (Questions 235 - 239)

WEDNESDAY 21 NOVEMBER 2001

COUNCILLOR PAUL BETTISON, COUNCILLOR PAUL JENKS, MIKE SLAGTER AND DAVID IRELAND

Chairman

  235. Welcome to the Committee. May I ask you to identify yourselves for the record?
  (Mr Slagter) I am Mike Slagter and I work for Brighton & Hove City Council.
  (Councillor Jenks) Councillor Paul Jenks, Vice Chair of the LGA Housing Executive.
  (Councillor Bettison) Councillor Paul Bettison, Chairman of the LGA Housing Executive.
  (Mr Ireland) David Ireland from London Borough of Hammersmith and Fulham.

  Chairman: Does anyone want to say anything by way of introduction or are you happy for us to go straight to questions? Straight to questions. Fine.

Mr Betts

  236. A general question to begin with. We have been round and looked at some areas of the country where there is a real problem with negative equity in low demand areas. What do you think can be done to overcome that problem in general terms?
  (Councillor Jenks) What we see with empty properties are very differing issues. In the part of the country I come from, Southampton, you are going to find high values but still empty properties and in the North of England—we generalise of course—generally you are going to get a problem with very low values and negative equity. One of the areas to look at is a scheme such as the one Salford is operating, or attempting to operate at the moment since it is in the very early stages. It is called Home Swap. This essentially takes control of a property in a low demand area, an area which is identified a falling through the floor in terms of property values, and swaps the deeds with a property on the outer circle, outlying edges of that to try to stabilise the local market and stabilise the use of those properties. That is in its early stages, but most of all the thing the LGA has found is that we need flexibility. What may work for Manchester may not work for Brighton and vice-versa, but even down to the individual properties, by far the most successful empty property strategies are those where firstly there is a designated empty property officer within the authority and that officer has a very flexible approach and a number of tools available to tackle each property. You will find that some will belong to portfolio landlords with a number of properties who for reasons best known to themselves regard properties being empty as a better bet than having people in them. With others, you will find the little old lady who has inherited a property, scared witless about renting it out to anyone, no idea how to get the property renovated and simply needs a bit of advice rather than anything else.

  237. A range of different measures.
  (Councillor Jenks) Absolutely.

  238. One particular issue we came across in the North West which concerned us was that while there were properties which were clearly lower demand areas and not very great value, in some cases fairly undesirable landlords were buying them up, putting in tenants on housing benefit and charging pretty high rents for them. Manchester Council said to us that they had tried to challenge some of these rent levels with the rent officer service and had been unsuccessful. Is this a problem which local authorities in general are experiencing? Are they challenging rents with the rent officer service? Are they being successful with those challenges?
  (Councillor Jenks) There is an issue with challenges to rent officers that they are mixed, there is not a strong pattern of success and it can be a particular problem. I believe later in the day you will be hearing from Gateshead Council who will talk to you about the need for a licensing scheme across the private rented sector. That is certainly something which would receive endorsement from the LGA. You have rightly identified not only the issue of people charging quite high housing benefit rents on properties in those low demand areas, but it is the whole package of management of those properties which is leading to areas which were previously a mixture of rent and owner occupation now causing major social problems as well as the physical degeneration of the area. The rent officer issue is one which certainly needs more attention and local authorities should be encouraged to challenge more often and look at why those challenges are not always successful.

Chairman

  239. You suggested that the Home Swap scheme in Salford was working. We were lobbied quite hard when we were up in Manchester that it was not that successful. One individual pointed out to us that she had been trapped in a house with negative equity for about six years. She was now being offered a move across the road to another part of the estate where she was again going to be trapped in a property. Any chance of moving to another part of the country was totally gone as far as she was concerned.
  (Councillor Jenks) It is an option, it is not a magic wand. Like all of the options proposed, it will not work in all cases, but if it works in some, then it is worth a go. I would not like to comment on the detail of what you say because I believe Salford will be giving you more information on the scheme at a later date.


 
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