Select Committee on Transport, Local Government and the Regions Memoranda


Memorandum by Blackburn with Darwen BC (EMP 29)

EMPTY HOMES

BACKGROUND

  Blackburn with Darwen BC lies to the north of Manchester and east of Preston. A former cotton-manufacturing town, its housing stock is dominated by terraced housing built in the last century. In April 2001 it had 4,374 empty houses (7.4 per cent of the stock). Of the vacant dwellings; 37 per cent had been vacant for less than six months, but 22 per cent had been vacant for over two years. The number of vacant owner occupied dwellings is about 1,000 more than are necessary for the housing market to operate. Since 1996 overall vacant housing rates have been above six per cent (see below). It is clear that the borough suffers from low demand in both the private and social rented tenures. It is estimated that around 10,000 private dwellings are at risk of low demand[17].



  Empty dwellings are found throughout the Borough. However, low demand is concentrated in areas of smaller terraced houses in the inner urban wards (both private and housing association tenure) and in some large estates on the edge of the urban area (primarily social rented but also containing a few "right to buy" properties).

CAUSES OF VACANCY.

  Basic data on the number of vacant dwellings comes from records of those dwellings exempt from Council tax. This provides some reasons why vacancies occur:—"awaiting or under probate, occupant in hospital/care, structural alterations or occupation prohibited" are the most common reasons given. However, for the majority of empty dwellings no specific reasons are given.

  Empty homes are the ultimate symptom of low demand for housing in a particular area. Other research conducted locally has arrived at tentative reasons as to why the Borough has low demand for many of its housing types. It seems to stem partially from broader population and economic trends:

    —  Population change—The Borough has had a high level of out migration (9.3 out migrants per 1000 population per annum in 1998-99). By 2021, the population aged under 45 will be decreasing. The Asian population contains a significantly different demographic profile to the white population with a much younger population at 1991 but this does not outweigh the decline in the whole population in the under 45 age groups.

    —  Economic Structure—There is a continued reliance on the manufacturing sector, which is a relatively low value added activity with low wage rates. There are a high proportion of people employed in manual jobs (male and female), which tend to be far less well paid than non-manual jobs. Those in non-manual jobs tend to earn far less than those elsewhere. There is a low rate of new business start-ups—below the regional average. There are particularly low levels of financial and business services employment—which generally across the rest of the country is the highest paying and fastest growing sector. Demand for social rented housing rises when the economy enters a recession. Conversely it falls at times of low unemployment.

    —  Poverty—Low wages are a major factor. On many indicators of poverty (such as proportion of income support and tax benefits, recipients, education attainment) Blackburn is well above average.

    —  Unemployment—Unemployment overall has remained below the UK and NW average but there is a low rates of economic activity in Blackburn with Darwen

    —  Accessibility—The M65 running through Blackburn provides links to the M6 with access to the M61—the main North South route serving the North West. Those with access to cars enjoy good accessibility to the regional employment centres of Preston, Manchester and Central Lancashire. The direct rail link to Manchester has an infrequent, unreliable and slow service. Rail links within East Lancashire and to West Lancashire are relatively limited. Thus overall provision and use of public transport in the area is low.

    —  Environment—Overall, the perception of the quality of the environment by people not familiar with the area is poor.

    —  Crime—Crime and the fear of crime are well established as factors that influence housing choice. Once an area obtains a reputation as a crime hot spot, those who are able often move out of the area. Households with children are particularly perceptive to this factor for fear that if they bring children up in an area of high levels of crime, they are more likely to become involved in crime.

    —  Development of alternatives—Development completed, planning permissions granted and allocated sites will allow for 7,252 dwellings to be completed in the period 1991-06 compared to 6,000 allocated in the Lancashire Structure Plan, adopted in 1997. High rates of housing development in the Borough were associated with the completion of the M65 and the rate of permissions granted has now fallen. The emerging local plan will have a reduced allocation but nevertheless there has been a considerable growth of new semi and detached houses in the Borough in the last decade. Low cost new homes for owner occupation, marketing initiatives (such as "£99 down and move in," fitted kitchens and free white goods) and lower interest rates have allowed lower income groups to buy new homes. This provides an attractive alternative to buying a pre-1919 house or renting from a housing association

    —  The Condition of the pre-1919 stock—Older houses are more likely to be unfit and require expensive repairs. Fewer have gardens and in-curtilage parking than in more modern areas houses and the perceived unattractiveness of parts of the Borough deters house buyers who have plenty of choice elsewhere. It also discourages investment by owners since house prices are not reflected by improvements in condition. High crime rates in parts of the Borough are a further deterrent.

  Social rented stock—Within the social rented sector, analysis of vacancies in the Council stock prior to transfer to Twin Valley Homes found increases in the number of terminations over recent years reflecting the more transient nature of those groups entering the Council rented sector[18]. The main motivations for tenancy terminations are:

    —  Moving to other Council accommodation—27 per cent of all terminations;

    —  Death—10 per cent;

    —  Neighbour nuisance and security. There was an increase in terminations due to harassment and nuisance over the period 1994-2000. It is also likely that the "Other" category in the surveys may also include nuisance;

    —  An average of around 138 Council tenants pa moved into private rented accommodation each year (1994-99)—some 9 per cent of all tenancy terminations;

    —  An average of 64 tenants pa left the Council stock to buy homes between 1994-99— representing 4.4 per cent of all terminations.

  The Council stock also experienced high levels of abandonment with on average 19 per cent of Council tenancies being abandoned each year (ranging from 23 per cent in 1995-96 to 17 per cent in 1997-98). Similar trends of difficulty in letting stock have been experienced by RSLs. Particular difficulties were experienced letting terraced housing generally (even if in good condition), some sheltered accommodation, 1970s flats and maisonettes. Demand for social rented accommodation is expected to remain from the elderly—although the size of the existing white elderly base will decline over time; young, single parents—remaining relatively stable in numbers; the socially excluded—likely to remain prevalent in the Borough due to continuing economic difficulties. Additional demand can be expected in the future from elderly Asians, and young Asians, provided problems of racial harassment can be overcome.

CONSEQUENCES OF EMPTY HOMES

  Empty Homes are a final stage in the declining popularity of an area. In low demand areas there is likely to be an increase in private rented homes as owners sell to private landlords or are forced to let out homes when they are unable to sell. Rented houses may become empty if new tenants cannot be found, or if tenants vandalise the property before leaving. The consequences of this process are:

    —  Further urban degradation through derelict properties, increasing the unattractiveness of inner areas and accelerating population loss.

    —  Loss of Council tax income.

    —  Loss of services such as shops as the population moves away.

    —  Loss of rental income, increasing the difficulty of maintaining the stock.

    —  Damage to neighbouring properties through water ingress, damp etc.

    —  Possible damage due to criminal activity taking place in empty homes; theft of fittings, arson, dumping, drug dealing together with the loss of a population able to deter such activity.

    —  Loss of community as permanent house owners with a stake in the area move out and are replaced by transient tenants and empty homes.

    —  Social tension may develop between private owners and private tenants (who may only stay in the area a few months).

    —  Radial tension may prevent occupation of low demand areas by the Asian community, which has settled in many parts of inner Blackburn. The 1997 Asian Housing Needs Survey[19] indicated that racial harassment acted as a considerable disincentive to persons of Asian origin leaving their established areas. Asian communities are often located in areas of small terraced housing; unable to move due to racial tension and low income. This may lead to overcrowding and social tension including youths "hanging out" on streets because of the lack of any alternative. The Council is attempting to combat this problem by encouraging the development of social rented houses for larger families.

BENEFITS OF RE-USING EMPTY HOMES

    —  Improvements in the appearance of the area if derelict and neglected properties are re-occupied, encouraging further occupation.

    —  Re-establishment of communities.

    —  Reduction in crime rate due to increased level of activities, overlooking etc.

    —  Restoration of Council tax, and rental incomes.

    Re-occupation of existing empty housing may not be totally beneficial, particularly if it is by short-term tenants who are likely to move out leaving properties empty again. The decline in popularity in areas such as Blackburn provides an opportunity to remodel inner urban areas and to provide facilities such as gardens and parking so that they can compete with new housing on the periphery.

EFFECTIVENESS OF GOVERNMENT ACTION TO DATE

  There has been no noticeable decline in the proportion of vacant property since the changes to Government policy last year. There has been a decline in the number of voids in the Twin Valley Homes Stock since the new RSL was created in March this year. This may be due to the prospects of investment in the stock, but a longer period is needed to judge the impact of stock transfer.

ADDITIONAL MEASURES (INCLUDING THOSE SUGGESTED BY THE COMMITTEE)

  The CURS Study[20] set out a number of recommendations for dealing with low demand. It identified Blackburn, Darwen and other freestanding towns at risk from low demand as requiring a long term approach that included selective clearance in the social and private sectors and a restructuring of the housing market that takes a particular account of the housing need of the ethnic minority populations. In addition to this long-term process of renewal, there needs to be short-term action to prevent the slide of vulnerable areas into low demand. This Council already carries out many of the recommendations of the Study;—it has a broad cross-tenure housing strategy (updated annually) and is developing sub-regional collaboration within the East Lancashire Partnership and the M62 groups of authorities, for example. The Council would support the following additional measures by Central Government in support of the long term restructuring of the housing market in low demand areas:

    —  Regeneration priorities should be to secure existing communities and, where necessary, create new ones in inner urban areas. Restructuring the housing market (including, if necessary, clearance and redevelopment) is one of the ways in which this will be achieved. The Council has had success with area-based approaches targeted on relatively small areas and basing renewal on group repair, clearance and environmental improvement. Replacement housing may be required on cleared areas. However, Government initiatives and guidance have paid too little attention to the problems of falling demand, particularly in the private sector. Developing the ability of the population can only take place after it is secure in a location, otherwise newly trained and affluent individuals will continue to leave urban areas[21].

    —  A Housing Market Renewal Fund is needed to finance long-term strategies and avoid the need to devote already available resources to dealing with acute crises caused by low demand and poor conditions (as is presently the case in the Borough)[22]. The Fund would finance selective clearance and comprehensive regeneration. There also needs to be recognition by central Government of the costs to local authorities of the cost of dealing with low demand areas and poor conditions in the private sector. The recent draft changes proposed for the General Needs Index is welcomed.

    —  Deteriorating conditions and the inability of owners to pay for repairs may accelerate the process of abandonment. In addition to renewal activity through group repair and clearance, local authorities need greater powers to help householders obtain funding in the form of loans etc.[23] The recently proposed relaxation of controls over the use of Renovation Grants is welcomed but will require additional funding to be effective.

    —  Charging full Council tax on empty homes. This may be effective in releasing some houses for rent. However in areas of low demand it is equally likely to lead to total abandonment by absent owner leading to further dereliction.

    —  Changes to VAT. The removal of VAT on repairs and refurbishment while charging VAT at the full rate on new dwellings would be broadly welcomed. However, this might restrict the viability of new build in inner areas and will not in any case be effective in those areas where demand has effectively disappeared.

    —  Revision of Compulsory Purchase Powers. This could include new criteria for compulsory purchase of housing obsolescence, streamlining the CPO process, open market valuation to be replaced by an actual market cost valuation where the housing market has collapsed and no comparative values are available[24], and relaxation of the legislation to allow public discussion of clearance as an option without the risk of paying compensation for blight. The latter would allow the preparation of clearance strategies that could be the focus of public discussion. There is also the need for more CPO "know how"; Government guidance on the use of powers should be brought forward.

    —  Planning. Generally, the new round of structure plans and regional development guidance is more restrictive towards greenfield development of housing. However, Blackburn with Darwen is suffering from the effect of allocations and permissions granted previously. Better consideration is needed of the effects of new housing on areas of existing housing by both planning authorities and within Regional Guidance. Calculation of future housing requirement should take account of the potential offered by low demand areas for new brownfield development; another reason why Councils need to identify clearance areas well in advance[25].

    —  Duty to establish an Empty Homes Strategy. This would not in itself reduce the number of empty homes and could lead to complacency on the part of officers and members. It would be effective if combined with resources and an overall strategy to deal with low demand

    —  Registration of Private Landlords. An increase in the number of privately rented houses seems to be part of the process of abandonment in areas of private houses. This seems to be accompanied by declining standards of repair and problems of nuisance from private tenants. At present, a register of landlords is meaningless without compulsion and could penalise the more conscientious landlords who meet the terms of registration while the less conscientious are unaffected. A compulsory register could be more effective in policing conditions but should make landlords responsible for tenant behaviour. It should be linked to the grant of housing benefit for greater effect. It may help prevent the decline of areas and enforce better standards but may accelerate the abandonment of houses by landlords unwilling to meet the requirements of registration. It would also have considerable resource implications in terms of necessary staff to monitor and inspect premises etc.

    —  Dealing with Negative Equity. This particularly becomes an issue where clearance is proposed as compensation levels will not be enough to allow home owners to buy a new home and may leave them with a continued debt. Increased subsidies for shared ownership and low cost housing for sale[26] may help as would increasing the attractiveness of social rented housing. All these solutions have resource implications.

September 2001


17   Blackburn with Darwen B.C. HIP Return 2001. Back

18   GVA Grimley and MORI North. Twin Valley Homes Housing Demand Study February 2001. Back

19   David Couttie Associates Blackburn Asian Housing Needs Survey 1997. Back

20   Centre for Urban and Regional Studies: Changing Housing markets and Urban Regeneration in the M62 Corridor, February 2001 and Housing Market Restructuring: The case for a Housing Market Renewal Fund, October 2001. Back

21   CURS Study op. cit. recommendation. Back

22   CURS Study op. cit. recommendation. Back

23   CURS Study op. cit. recommendation. Back

24   DTZ Pieda Changing East Lancashire The Housing Market 2000. Back

25   CURS Study op. cit. recommendation. Back

26   CURS Study op. cit. recommendation. Back


 
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