Memorandum by the National Housing Federation
The National Housing Federation represents over
1,400 independent, not for profit social housing providers in
England. The Federation's members include housing associations,
co-ops, trusts and stock transfer organisations, and they own
and/or manage more than 1.7 million homes provided for affordable
rent, supported housing and low cost home ownership, and deliver
an increasingly diverse range of community and regeneration services.
The large majority of the Federation's members are registered
with the Housing Corporation. The Federation welcomes the opportunity
to give evidence to the Select Committee's Empty Homes Inquiry.
Addressing the issue of empty homes is key to
delivering the Government's objectives for housing, neighbourhood
renewal and sustainable regeneration. In this evidence, the Federation
sets out why the incidence of empty homes has become more commonplace,
and why it is vital that adequately resourced, effective action
is taken to address the issue. It is evident that there are regional,
sub-regional and local economic, social and environmental inequalities
that contribute to unhealthy housing markets, of which empty homes
are a symptom. These unhealthy markets in turn, undermine investment
in Government policy priorities, such as health and education.
Therefore tackling the issue of empty homes and the broader challenge
of non-decent homes is core to delivering the Government's neighbourhood
and urban renewal objectives. To achieve this, the Federation
make the following recommendations:
At the national level:
Greater recognition is given to the
major economic, social and environmental disparities that exist
between and within regions in England, a major cause of empty
A well resourced "housing market
renewal fund" is created to resource local housing market
restructuring, where markets are failing or are in danger of failing,
to supply or help rationalise the type and tenure of housing that
is in demand.
Value Added Tax is harmonised at
5 per cent on costs for new build housing and major repair and
improvement work to residential properties.
The upward curve of resources allocated
in the Spending Review 2000 must be continued for housing and
neighbourhood renewal purposes in the forthcoming Spending Review
At the regional level:
Guidance should be issued to Government
Offices for the Regions, Local Authorities and Local Strategic
Partnerships on how low and changing housing demand links with
the neighbourhood and urban renewal agenda, and it links with
the Department of Transport, Local Government and Regions' (DTLR)
Decent Home targets.
At the local and neighbourhood level:
Local Authorities and/or Local Strategic
Partnerships should be given the power to establish a mandatory
accreditation scheme for private landlords operating in deprived
Greater recognition is given to the
neighbourhood renewal work currently being undertaken by registered
social landlords in deprived neighbourhoods.
Concentrations of empty homes commonly characterise
urban and neighbourhood deprivation. A combination of factors
is often the cause of this. Economic decline, particularly that
associated with the traditional industries is one. In other places,
the reasons for empty homes are more closely related to a lack
of resources available to address major repairs and improvements
to poor quality housing. Some housingpublic and privateis
simply obsolete due to its size and type. A cross cutting theme
of urban and neighbourhood deprivation is the issue of neighbourhood
failure. Where mainstream serviceseducation, health, police,
and housingare perceived to have failed, it is very difficult
to persuade people that the place will get better. Empty homesacross
all tenuresare often a symptom of neighbourhood decline,
not a cause.
The statistical evidence on empty homes can
be accessed from the DTLR's Housing Statistics Postcard (July
2001). As of April 2000, registered social landlords had the best
record on empty homes2.8 per cent nationally. Local authorities
had a slightly higher rate at 2.9 per cent, with the private sector
(private rented and owner occupied) at 3.7 per cent and "other
public sector" at 16 per cent. In numerical terms, the picture
is different: some 623,000 private sector homes were empty; local
authorities with 86,000; registered social landlords with 38,000;
other public sector with 16,000.
Empty homes in the public sector are divided
into two general categories: long term and short term "voids".
Long-term voids are those that require major works, eg, structural
repairs to the floors, walls and roof; renewal of installations
such as gas, electricity, water supplies, heating and ventilation,
etc. Short-term voids are those properties that may require some
minor repairs, but are considered available for letting to prospective
tenants. For both the local authority and registered social landlords
in April 2000, the number of short-term voids was just over half
of the total number of voids: 47,000 for the local authority landlords
and 20,000 for registered social landlords. Respectively, this
represents a void rate of 1.6 per cent and 1.5 per cent that is
a reasonable level required so that new and transferring tenants
can be re-housed without undue delay. The average time taken to
re-let short term voids during the year April 2000 was 6 weeks
(local authorities) and 5.7 weeks (registered social landlords).
The critical category, therefore of social housing voids are the
long- term voids that require considerable capital investment
to bring the homes up to a decent standard.
The national picture does not highlight the
major variations between the nine English regions. The North West
(including Merseyside) had the highest number and percentage of
empty social homes in April 2000: 10,435 (4.9 per cent). Regions
such as the South West and East had 2,669 (2 per cent) and 1,900
(1.9 per cent) respectively.
The issue of empty homes is not unique to one
sector, and the record of registered social landlords is better
than the others. Nonetheless, the statistics offer little comfort
for registered social landlords and the public sector generally.
The issue of low and changing demand for housing, together with
the overlapping issue of unpopular housing, represents a challenge
to the future prosperity of registered social landlords. Recently
undertaken research by MORI, commissioned by the National Housing
Federation, indicated that owner-occupation was the tenure of
choice for 83 per cent of respondents. In the evidence that follows,
some solutions to how empty homes, as a discrete issue, can be
addressed are set out, whilst offering some answers to the wide-ranging
questions set by the Select Committee.
In this section, the Federation offers evidence
on the following issues: The consequences of so many homes being
empty, including the link between empty homes and urban degeneration,
social and racial tension; the benefits which would arise from
bringing empty homes back into use; why so many homes are empty;
the effectiveness of Government policy to date, including the
results of the 2001 Budget; what additional measures should be
taken by the Government, the Housing Corporation, local authorities
and others, and, in particular, whether local authorities should
be permitted to charge the full council tax on empty homes; there
should be further changes to VAT; and should compulsory purchase
powers should be revised; what measures should be taken to deal
with the problem of negative equity; what Government Departments
and their agencies, the NHS, local authorities and RSLs should
do to bring more of the properties they own into use.
The consequences of many homes being empty vary.
There are personal costs to prospective tenants who are not being
housed. There is a broader social, economic and environmental
cost to people and places where empty homes that are not in demand
characterise the neighbourhood. It is often the case that the
very young and the very old and particularly people from black
and minority ethnic communities live in the most deprived neighbourhoods
living in run-down housing where empty homes is often an issue.
Those who are able to leavenormally economically active
householdsoften do. The recent DTLR report A Review
of the Evidence Base for Regeneration Policy and Practice identified
this trend. The Government recognised neighbourhood decline as
an issue when it commissioned the Social Exclusion Unit to examine
its causes. Many informative and incisive reports have followed,
particularly the Policy Action Team 7 Report on Unpopular Housing.
The Federation fully supports the Government's
approach to Neighbourhood Renewal, set out in A New Commitment
to Neighbourhood Renewal Action Plan, launched by the Prime
Minister in January 2001. The Federation also fully supports the
broader vision for urban regeneration set out in the Urban
White Paper, and its rural counterpart. The resources allocated
for regeneration, neighbourhood renewal and social housing purposes
in the Spending Review 2000 represent a step in the right direction.
The rising curve of public investment is shown on the table below.
However, it must be recognised that the increase is built on significant
long-term reductions in resources for housing over the 1980s,
redressed in the mid 1990s, but again in decline in the later
1990s. Current forecasts for housing resources (as set out below)
will only return gross investment to the 1991-92 position.
|Spending Review 2000
|Neighbourhood Renewal Fund ||£200m
|New Deal for Communities||£290m
Source: HM Treasury Spending Review 2000; DTLR Press
Release No 489RDAs; DTLR Press Release No 492Housing
(* Figures exclude HRA subsidy and the housing private finance
It is of critical importance that the investment identified
under these headings are consolidated and built on in the forthcoming
2002 Spending Review. Ambitious Public Service Agreement targets,
identified in the 2000 Spending Review, have been set for all
social housing, which is to be of a "decent" standard
by 2010, with a third achieving this by March 2004. Recent DTLR
guidance on decent homes highlights an estimated 1.4 million non-decent
local authority homes and 280,000 non-decent homes in the registered
social landlord sector. Whilst these figures date back to 1996,
the anticipated numbers in the forthcoming 2001 English House
Condition Survey (EHCS) are unlikely to be substantially different.
The Federation anticipates that much repair and improvement
work will be commissioned as a result of the Government's large-scale
voluntary transfer programme. In last year's Housing Green Paper,
the Government expected 200,000 council homes to be transferred
to existing or new registered social landlords during the next
decade. The transfer process offers the opportunity of levering
in significant private sector resources to undertake the major
repairs and improvements that much council housing has required
for many years. The Federation believes that this will be a major
contributory factor to achieving the decent homes target.
Previous initiatives have shown that such housing investment
must be complemented by a commensurate increase in other resources,
such as the Neighbourhood Renewal Fund, New Deal for Communities
(NDC), Sure Start and the RDAs' Single Pot (as examples). Many
of the resources allocated to the NDC programme and the RDAs will
be taken up by existing spending commitments of the 39 NDC neighbourhood
pathfinders and the Single Regeneration Budget Rounds 1-6. Therefore,
the need to increase resources for neighbourhood renewal and regeneration
are particularly great to ensure they are substantial enough to
complement investment in social housing. It should be noted that
guidance for RDA resources in the current transitional year made
little reference to housing. Far greater co-ordination will be
needed to ensure resources are used effectively in the future.
The Chancellor in the 2001 Budget announced six tax cuts
targeted on enterprise, designed to help facilitate urban regeneration,
all of which have been legislated for in the 2001 Finance Act.
An announcement is still awaited on which areas will be exempted
from stamp duty. The Federation expects the tax cuts to make a
marginal difference to people and organisations involved in urban
regeneration, but it will be some years before the effects of
the changes can be measured.
The Federation has been seeking a reduced VAT rate for all
works to existing social housing since 1998 and submitted a detailed
case in support of its Budget Submission for 2001. There is a
broader case for unifying the VAT rate at 5 per cent for new build
and the refurbishment of existing buildings. The Federation welcomed
one of the Chancellor's 2001 tax cuts that reduced VAT to 5 per
cent for residential conversions, but believe more needs to be
done. The Urban Renaissance vision set out in Lord Rogers'
Urban Task Force Report will heavily rely on fiscal incentives
and rectifying the imbalance in VAT should be a significant incentive
to developers to develop on brownfield, as opposed to greenfield,
There must also be some recognition of the need for social
housing investment in low demand areas to achieve neighbourhood
renewal. This idea is developed in the section on the Housing
Market Renewal Fund. The current methods of allocating resources
is achieved by using the Housing Needs Index and the General Needs
Index, involving complex formulae which can cause different needsregeneration
and new housing needto be in competition, often to the
detriment of areas suffering from low and changing demand. Consideration
should be given to housing resources being split into two categoriesregeneration,
and new housing needwith different criteria, thereby delivering
some housing resources to areas suffering from low and changing
demand, and ensuring a political, rather than a formulaic decision
on the allocation of resources. This does not address the issue
of how the funding of repairs and improvements is to be managed,
as it does not fit neatly into the regeneration/new housing need
division and requires further consideration.
On Compulsory Purchase Orders (CPO), the Government announced
its intention to reform the CPO system in the Urban White Paper,
published in November 2000. The consultation proposals are scheduled
for publication in Summer 2001. The Federation hopes that the
proposals will facilitate a speedier CPO process, particularly
where absentee land and property owners are causing un-necessary
delays to urban regeneration and neighbourhood renewal schemes.
There must also be recognition of the needs of homeowners with
a stake in the neighbourhood, and those who have bought homes
as a short-term investment.
In this section, the Federation offers evidence on the following
key issues: Too many homes are being built and proposed by Regional
Planning Conferences on greenfield sites in such areas; Government
Offices for the Regions should be more vigorous in implementing
Government policy laid down in planning policy guidance notes;
regional planning guidance is taking proper account of the re-use
of empty properties in making provision for housing.
The challenge of low demand for housing is one of the primary
causes of empty homes. This trend has been identified at a regional
and sub-regional level. The recent report of the Social Exclusion
Unit's Policy Action Team 7 on Unpopular Housing indicates that
half of the unpopular social housing that exists nationally466,500can
be found in the three northern regions. However, low demand housing
is not the exclusive preserve of social landlords. In the same
northern regions, 58 per cent of the unpopular private sector
housing that exists461,500can be found. The Policy
Action Team demarcated low demand housing from unpopular housing,
and found the latter was a characteristic of social housing in
London and the South East.
To complicate matters further, there is strong evidence of
a robust market for house building and owner occupation within
major cities of the north and their environs. It is apparent that
many neighbourhoods between the inner core and outer prosperous
suburbs are failing to attract new households on relatively low
incomes. The M62 Report highlighted an advertisement for new build
3 bedroom property in the north west available at £49,000.
Social landlords are effectively competitors for customers considering
such purchases. The report highlighted the following reasons why
some neighbourhoods were suffering abandonment and/or declining
demand: a predominance of a single tenure; monolithic provision
(eg, thousands of two or three bedroom houses 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.
An over-arching factor that makes it difficult to arrest
and reverse abandonment and/or declining demand is the perception
of the social, economic, and environmental profile of a stigmatised
neighbourhood and the public services that it receives. It is
very difficult, but not impossible, to change this perception,
but it invariably requires major area based interventions and
significant resources to match.
There is a clear need to create a more balanced housing market
in such places, with a range of flexible tenure initiatives, bridging
the gap between home-ownership and social renting. Such initiatives
could include shared ownership, sub-market renting, the Starter
Home Initiative and possibly the recently proposed Equity Stakes.
A well-resourced Housing Market Renewal Fund, administered
by the Government Regional Offices could offer the resources to
deliver housing market renewal and neighbourhood renewal outcomes
to specific Housing Market Renewal Areas. Such a fund would offer
scope to address housing market failure issues, and add value
to other neighbourhood management and renewal activities funded
by the Government and put the right homes in the right places.
The Housing Market Renewal Fund will be crucial to addressing
regional and sub-regional economic, social and environmental imbalances
and will help deliver the Neighbourhood Renewal and Urban White
Paper implementation plan targets.
The Fund would resource the following types of capital items:
targeted renovation and environmental grants; remodelling of existing
stock; land and property acquisition costs; professional and legal
fees; a low cost loans fund; an improvement for sale fund; a home
swops subsidy; gap funding for housing for sale; private sector
housing improvement; demolition, site preparation and reclamation;
targeted social housing and new build. Revenue items that would
be resourced would include supporting the cost of producing an
annual Housing Market Renewal Prospectus that sets the framework
for investment; staffing for the development of the Housing Market
Renewal Areas; revenue support from staffing the new housing regeneration
vehicle; support for the community planning process; social support
for elderly residents in clearance areas enhanced neighbourhood
management services for localities in decline and awaiting clearance.
The Areas would also incorporate relaxed planning and tax regimes
in order to attract private investment. The Federation is working
on the costing of market renewal in a range of settings for submission
to the next Spending Review.
Registered social landlords have a strong record on area-based
approaches to dealing with the issue of empty homes and neighbourhood
decline. Recent case studies of processes and/or work undertaken
include the following:
Case Study 1In Birmingham, a consortium of housing
associations including Prime Focus and Midland Area were successful
in attracting Single Regeneration Budget 5 resources to help regenerate
Handsworth, an area with a large black and minority ethnic population.
The development of the following initiatives has begun to help
this process: local lettings; tenancy support; neighbour participation;
remodelling stock and "deconverting" small flats into
large family homes; selective disposals to sitting tenants and
local people; changing the use of some residential properties
for community purposes.
Case Study 2Sunderland Housing Group, with assistance
from the City of Sunderland Health and Housing Services, have
developed a Neighbourhood Assessment Matrix. This can identify
the level of stability in neighbourhoods; identify trends in neighbourhoods
over time and identify whether stability is declining or improving
and act as an early warning system; assist with the development
of neighbourhood renewal options including value for money and
investment factors; and, encourage housing professionals to think
strategically about neighbourhoods and assist with the development
of neighbourhood action plans.
Case Study 3Housing Regeneration Companies (HRCs)
are Housing Corporation-sponsored bodies, designed to co-ordinate
and deliver area regeneration projects, where housing is a core
theme. Creating HRCs was one recommendation of the Lord Rogers'
Urban Task Report. Their focus will vary according to the neighbourhood,
but their core purpose is to adjust the supply of different housing
types to better fit local demand; promote the use of existing
methods and funds to regenerate properties and develop vacant
sites; engage local communities in their activities; and build
effective partnerships with the public, private and voluntary
sectors to promote "joined-up" workingeg link
housing renewal with urban regeneration policies. There are currently
four pilot HRCs in Coventry, Liverpool, London and Rochdale, with
a further possibly in Hartlepool. Registered social landlords
in all four instances are key partners that will deliver each
Case Study 4Temporary social housing in London is
a key source of accommodation for homeless households. In 1999,
26,400 homes were leased from the private sector for social housing
purposes. This allowed homeless households to be accommodated
in homes rather than bed & breakfast and hostel accommodation.
London registered social landlords are the key partners in supplying
this increasingly important type of accommodation, simultaneously
reducing the number of private sector empty homes.
On Regional Planning, the Federation believes that regional
planning guidance documents published to date pay strong attention
to the principles set out in the Government's Urban White Paper.
They are generally supportive of the 60/40 brownfield/greenfield
redevelopment target that is to be achieved by 2008. However,
whether the principles translate into practice remains to be seen,
and the Government Offices for the Regions will have a pivotal
role to play to ensure targets become a reality. They will also
have wider role to play in "joining up" regional activity
that is becoming increasingly complicated by the creation of the
Regional Development Agencies and the growing role of Regional
Chambers (outside of London).
In this section, the Federation offers evidence on the following
key issues: Whether a statutory duty should be placed on local
authorities to establish an Empty Homes Strategy; what specific
steps should be taken in areas of low demand, including whether
regeneration initiatives are adequately addressing the problem
of empty homes; whether too many homes for rent continue to be
built in such areas; and whether some homes should be demolished;
whether local authorities should establish a register of approved
The Federation is not convinced of the need for a statutory
empty homes strategy. In the recent DTLR guidance note 2001
Housing Investment Programme to local authorities, the assessment
criteria for housing strategies is set out. This includes a requirement
to hold information on the housing market, using data on markets
and stock condition. The guidance also requires a clear analysis
of mismatches between the supply and demand for affordable housing
for particular dwelling types/sizes. The Federation believes that
this should be sufficient for local authorities to assess the
number of empty homes in its district and trends that will determine
future numbers that may or may not require action. The Federation
would be concerned if the data collection and provision required
from local authorities were relaxed, so as to undermine the validity
of the supply and demand data.
The New Commitment to Neighbourhood Renewal: National
Strategy Action Plan, published in January 2001, was the culmination
of over three years work on the causes of neighbourhood decline
and social exclusion, and what could be done to reverse its effects.
The 105 recommendations included: baseline assessment of numbers
of dwellings and number and location of wards affected and at
risk from low demand and unpopular housing, by March 2002 (commitment
67); monitoring low demand and abandonment with the aim of achieving
a turn round in declining demand, by 2010 (commitment 68); and,
a clearer and more flexible role for local authorities and registered
social landlords in using lettings policies to create sustainable
communities (commitment 74). Delivering these commitments will
be crucial to delivering the broad and inter-related objectives
of healthy housing markets and sustainable neighbourhoods, but
they will require adequate resources.
A key issue for people living in deprived neighbourhoods
is that of anti-social behaviour generally and more specifically,
the behaviour of "problem" tenants. Where housing is
in low demand, some tenants and their families may feel greater
latitude to behave in an anti-social manner. This will be exacerbated
by poor services from other mainstream providers. Processes and
schemes such as crime reduction partnerships; anti-social behaviour
orders; and neighbourhood warden schemes can make a difference
for the better. Registered social landlords with their local authority
partners have been instrumental in making the policy work in practice.
The Federation is concerned that no guidance has been issued
to Local Strategic Partnerships (LSPs) on how the issue of low
demand should be treated, even though it will be a core element
of their work in many English regions. The LSP guidance features
only a few passing references to the targets for decent social
homes. This omission is reflected similarly in the recently published
DTLR Decent Home guidance. A minor mention is made of the impact
of demolition, right to buy and large-scale voluntary transfer,
factors that will have a major impact on whether the decency targets
As mentioned above, there is a key role for government and
the Government Offices for the Regions (GORs) in coordination
of strategies. These omissions must be rectified in guidance to
GORs, local authorities and local strategic partnerships on how
low demand issues are to be addressed, and how the national decent
homes targets are to be met regionally, locally and at the neighbourhood
level. This should form a vital element of the Office for National
Statistics work on better information on deprived neighbourhoods.