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


Memorandum by Tameside Metropolitan Borough (EMP 65)

EMPTY HOMES

1.  INTRODUCTION: EMPTY HOMES IN TAMESIDE

  1.1  Like many Local Authorities, Tameside has a significant number of empty homes, in both the public/social, but particularly the private sector. The 2001 Housing Investment Programme returns to the Government identified almost 3,500 private sector properties lying empty; of which 1,186 are long-term empty properties.

  1.2  Tameside MBC recognises the environmental and social threats that empty homes can have within residential areas. They quickly fall into disrepair, attract anti-social behaviour, and can become a catalyst for destabilising local housing markets and communities. The Council has had an Empty Homes Strategy for several years; properties can be reported by members of the public or by the owners themselves, via phone or the Council's web page. Although no grants are available to assist owners, the Empty Homes Co-ordinator can inspect properties, offer advice on how they should proceed and ultimately take enforcement action.

  1.3  Reasons for owners leaving properties lying empty are varied, but it is important to distinguish between those short-term empty properties which are a normal feature of any healthy housing market and others which result from some form of housing market failure. In Tameside the overriding cause of empty properties is a combination of older properties in poor condition and housing market areas, which suffer from low or changing demand. These problems are shared by many housing markets in the North of England, and require a particular set of tools and solutions.

2.  LOW DEMAND HOUSING AND EMPTY PROPERTIES

  2.1  In areas of high housing demand, the main objection to the existence of empty properties is that this is an inefficient allocation of resources, given that there is an overall shortage of supply. As a rule, where the market is buoyant, the normal operation of demand and supply should ensure that empty homes are returned to use. The private rented sector in particular, can play a useful role in this respect bridging periods of owner occupation. In this scenario, it is often an inability or unwillingness of the owner to take action, that results in vacant units.

  2.2  The situation in less buoyant market areas is quite the reverse. An increase in private rented accommodation into an area which is already suffering from housing market decline, can exacerbate this process, by introducing numbers of more transient households (further breaking down community ties) and low income benefit dependent private tenants and students. Where owners are competing with many others to sell or let their properties, a "saturated" market may produce small or no returns on their investment.

  2.3  The 2001 report by the Centre for Urban and Regional Studies "Changing Housing Markets and Urban Regeneration in the M62 corridor" identified five factors which appear to be significant drivers of low or changing demand in residential areas:

    —  A predominance of one tenure;

    —  Monolithic provision (eg thousands of two or three bedroom properties in one locality;

    —  Concentrations of a particular dwelling type (eg high rise flats or back of pavement terraces);

    —  Economic inactivity and unemployment;

    —  Concentrations of elderly people dependent on benefits.

  2.4  Although there is no hard and fast rule about particular causes of void properties in the Borough, a significant number are pre-1919 pavement accessed terraced houses. Built in large numbers to house mill and factory workers, the location, layout and size of these properties does not comply with the housing and lifestyle aspirations of many households today.

  2.5  These properties tend now to form poor neighbourhoods, where there are a mix of low income home owners (particularly older households), private tenants and social housing. Housing market problems in these areas tend to be compounded by high rates of crime and anti-social behaviour, together with poor health and education attainment. Owners' inability or unwillingness to invest in these areas creates a downward spiral of deteriorating housing condition and falling or at best stagnant house prices.

  2.6  The Towns of Ashton-under-Lyne and Hyde have been or are currently the subject of area renewal activity. There are concerns however, that area regeneration can actually speed up depopulation, if increases in income of local residents arising from economic development and social inclusion policies, are not pursued in tandem with the restructuring of the housing stock.

  2.7  Although small scale group repair and clearance schemes have been carried out within Tameside's Renewal Areas, there is an increasing view that activity at this scale cannot tackle the underlying problem of the mismatch between supply and demand for older, and increasingly obsolete forms of housing. High demolition and compensation costs and low land values for reclaimed sites however, mean that existing resources for private sector renewal are miniscule compared to the funds required to address fundamental clearance and stock restructuring.

3.  POLICY RESPONSE

  3.1  Changes in legislation announced in the April 2001 budget will greatly assist in the process of returning empty homes to use. In particular:

    —  Abolishing stamp duty on property transactions in Britain's most disadvantaged communities;

    —  150 per cent accelerated payable tax credit for the costs of cleaning up contaminated land;

    —  A 100 per cent allowance for converting space above shops into flats;

    —  A reduced VAT rate (5 per cent) for converting residential properties into a different number of dwellings; for example, houses into flats;

    —  A minor adjustment to an existing zero rate to include buildings or parts of buildings that have not been used as a dwelling or number of dwellings for 10 years or more, allowing a zero rate of VAT for their onward sale; and

    —  A reduced rate of 5 per cent on refurbishment costs for properties empty over three years (announced following consultation).

  3.2  A national policy response on empty homes which does not differentiate between regional drivers however, will at best, fail to reduce incidences of the problem and may even increase the number of empty properties. In the North West for example, attempts to reinvigorate the private rented sector in older housing areas could exacerbate existing housing market weaknesses, leading ultimately to a greater number of voids. The following paragraphs highlight policies and initiatives which would assist in tackling the problem in Tameside and the North West:

  3.3  The introduction of a new Market Renewal Fund in low demand areas:

    —  Areas of large scale strategic clearance where housing markets have already collapsed.

    —  Smaller scale clearance (but significantly more than present resources allow) as proactive, preventative measures to protect areas at risk of changing demand.

  Proposals for a fund of this nature are currently being formulated by several local authority partnerships in the North of England and the Midlands, and are being co-ordinated by the National Housing Federation and CURS. The fund could be introduced within locally negotiated Public Service Agreements or could be administered via a regional development agency.

  3.4  In the light of the consultation paper on Private Sector Renewal, Reform of the Housing Grants, Construction and Regeneration Act 1996, Local Government and Housing Act 1989 and Housing Act 1985, increased flexibilities for local authorities, particularly around:

    —  Data protection issues: to assist in the identification of empty properties and owners from Council Tax registers.

    —  CPO powers: both to assist with strategic clearance and to enable individual problematic properties to be addressed.

    —  Private housing grant provision and equity release schemes.

    —  Council Tax Exemptions—discretion to charge full Council Tax on empty and second homes.

    —  Land use planning: requirement to take account of the existence of low demand housing when both setting regional new housing requirements and approving new housing development.

  3.5  Further Government initiatives could be as follows:

    —  Complete exemption from VAT on refurbishment works to existing properties, or VAT charged on new housing development, to create parity with new build and to remove incentives for greenfield development.

    —  Widening geographical areas which are currently eligible for the abolition of stamp duty to include Neighbourhood Renewal Areas identified by Local Strategic Partnerships. This would boost housing market activity in deprived areas, and crucially, encourage higher income households into these localities.


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 20 March 2002