Select Committee on Transport, Local Government and the Regions Memoranda


Memorandum by Southampton City Council (EMP 31)

EMPTY HOMES

1.  INTRODUCTION

  1.1  Having appointed the country's first Empty Property Officer (EPO), Southampton City Council (SCC) launched its widely acclaimed and pioneering Empty Property Strategy (EPS) in March 1992.

  1.2  Specifically targeting the 3,500 or so vacant private sector dwellings in the city, and opportunistically mobilising spare space above shops and redundant commercial premises, Southampton's EPS has provided over 730 extra homes, of which around two thirds have been rented to Council-nominated homeless households (by owners either leasing their properties to Registered Social Landlords (RSLs) for up to 15 year periods, or by acting as Council-approved landlords in their own right).

  1.3  It is this Council's fundamental contention to the Select Committee that notwithstanding more favourable market conditions, an EPS in the Southampton urban context is equally valid today as it was nearly 10 years ago, in terms of both the inherent nature of its private sector dwelling stock, and its continuing pressures of housing needs and demand.

2.  CONDITION AND VACANCY DYNAMICS

  2.1  Local research—such as the House Condition Survey 1997 and "Empty Properties—A Survey in Southampton"—consistently suggest a relatively constant overall pattern for privately owned empty dwellings in Southampton:-

    —  3,500 empty properties overall

    —  1,550 empty for over six months

    —  1,000 empty for 12 months or more

  2.2  Interestingly, this suggests a continual "moving target" scenario of properties becoming vacant and reoccupied, but at levels (5 per cent) considerably larger than what might be reasonably expected in an otherwise healthy housing market (2 per cent).

  2.3  No doubt even more systematic research would help explain this phenomenon, but the underlying nature of Southampton's private sector housing stock of some 65,000 dwellings—where around 50 per cent were built before 1945 and 1:5 dwellings are either unfit or require essential repair—seems in part to be the cause. The Empty Property Survey, for example, found that the majority of vacant properties tended to be in the older age brackets.

3.  EMPY PROPERTIES AND HOUSING NEED/DEMAND

  3.1  As is probably the case with other urban areas in the South of the country, the scale of Southampton's private sector empty property scenario seems perverse in comparison with its acute local housing pressures.

  3.2  As a South Coast urban conurbation undergoing major transformations over recent years, Southampton is also a city of economic contrasts, where lower-than-national-average income households struggle to access higher-than-national-average house prices, particularly amongst "key worker" personnel.

  3.3  Significantly, a recent Housing Needs and Housing Market Survey suggests Southampton needs an extra 779 units of affordable accommodation each year (to which the EPS contributes about 30 "temporary social housing" units through its RSL leasing partnerships). Moreover, the Survey also identified a growing number of one person households aspiring to larger accommodation and the desire of most people intending to move was to live in smaller, owner occupied dwellings in the City (for which many privately owned empty properties could be well suited).

  3.4  If further justification for proactively addressing empty property potential in Southampton was needed:

    —  686 homelessness applications were accepted by SCC during 2000/2001

    (EPS units offer good value for money alternatives to B & B scenarios);

    —  500 Asylum Seekers are expected year on year for the foreseeable future;

    —  The County Structure Plan requires 7330 extra homes in the City by 2011;

    —  Urban Capacity projections necessarily include re-occupied properties to help meet this quota at some 88 units per annum;

    —  Regional Planning Guidance for the South East (Policy H4.a (ix)) requires Council's to identify suitable vacant properties for affordable housing to help meet the provisional regional indicator of up to 19,000 affordable homes per annum.

  3.5  Given this context, it is virtually axiomatic that the Council and its RSL partners need to continually maximise the efficient use of their own stock, and so set the necessary good example to the private sector.

4.  EMPTY PROPERTY CHARACTERISTICS/OWNER AGENDAS

  4.1  There are no particular concentrations of privately owned dwellings in the City, although parts of Southampton's SRB 2 inner city area are marginally worse than elsewhere. And apart from a few notable exceptions, most vacant residential and non-residential properties are "pepper-potted" throughout the city, and seem predominantly owned by individuals or small portfolio landlords, rather than large companies, pension chains etc.

  4.2  As to the reasons for properties remaining empty, these were last researched nationally in 1988, (and less specifically in 1996), by the then DETR. But 10 years experience in Southampton suggests seemingly "objective" reasons—such as costs of repair—often mask more personal and idiosyncratic agendas, such as unrealistic rental expectations, misplaced sentimentality, intransigent anti-officialdom, total disinterest, indecisiveness due to age, mental incapacity etc.

  4.3  Accordingly, the City Council contends that Southampton's success is partly due to the appointment of a dedicated Empty Property Officer (EPO) who, unlike other Council colleagues, has the benefit of time and flexibility to work through labour-intensive personalised agendas. But it further contends that while EPO persuasive options are crucial—such as Housing Corporation based RSL leasing / temporary social housing grant products, Council Renovation grants for landlords, general help and advice about letting options etc.—the Council's powers of coercion have also proved strategically effective.

  4.4  Many long-term empty properties in the City enjoy extremely conspicuous locations but owners have proved totally impervious to offers of help, offers to buy, neighbours complaints, repeated anti-social activity, re-boarding costs etc. However in the last year, the Council has pursued the owners of 12 such properties under "threat" of Repairs Notices, Enforced Sale, CPO as appropriate. Interestingly, dialogues have been established with owners where none existed beforehand, resulting in three properties being re-occupied, two being voluntarily improved, and a further two now subject to a Demolition Order.

  4.5  Although SCC lacks recent (housing) CPO experience, the Select Committee are respectfully asked to note the continuing need for residual, proactive enforcement action when all else fails to break owner inertia.

  4.6  Arguably, long-term empty dwellings fundamentally differ from occupied premises in that they no longer constitute a "home" in the accepted sense. Accordingly CPO rules and procedures could legitimately differentiate to enable speedier resolution of the former scenario. However, the significant and often irrecoverable revenue impact on Local Authorities remains an issue.

5.  SUCCESSFUL EPS PRINCIPLES

  5.1  Other time-honoured and potentially portable principles which have been shown to work in Southampton and which can be offered as best practice examples include:-

    —  the need for ongoing Corporate commitment throughout the Council, and the benefits of Lead Member / Senior Officer as "champions";

    —  the contemporaneous targeting of all types of residential and non-residential properties in almost every location (over-concentration on archetypal long-term problem properties is disproportionately labour-intensive for a slow return);

    —  partnership working with RSLs provides the necessary wider range of options to maximise effectiveness (but see paragraph 6.9 below).

  5.2  It is also pertinent to emphasise that joint working between Regeneration and housing colleagues has usefully demonstrated the importance of "micro" EPS policies—addressing multiple individual ownerships in SRB 2 focus areas—which interface with "macro" (Regeneration) policies to achieve the required holistic solutions.

6.  ISSUES AND RECOMMENDATIONS

  6.1  Having demonstrated the benefits of a committed EPS, SCC has previously endorsed the Empty Homes Agency's campaign for the government to place a duty on all Council's to undertake EPS activity, and now wishes to reiterate this to the Select Committee.

  6.2  The government already expects each Council to adopt a multi-tenure strategic housing role, but given the unusual nature of empty property work and the degree of commitment required for it to be properly effective, the concern is that vacant properties in the private sector are in danger of marginalisation unless greater statutory focus is forthcoming. Unless such a duty is introduced, the risk is that:

    —  Government encouragement will continue to motivate only the most proactive Councils (such as SCC);

    —  Even proactive EPS Councils (like SCC) must ongoingly re-assess this commitment against other priorities.

  6.3  Having this duty would also assist with the problem of researching over protected source data within Councils, such as Council Tax database records (which the Empty Property Survey established to be the most reliable empty dwelling data available to Councils, and which the DTLR expects Council's to use to provide HIP and Best Value information each year).

  6.4  It is evident from discussions with other Councils—such as those which are members of the Hampshire Empty Property Forum—that there is diversity of legal interpretation and database recording systems which make comparative meaningful analysis of respective local empty property problems extremely difficult. The suggestion to the Select Committee is therefore that the DTLR should commission a small number of Councils to investigate the feasibility of devising "template" IT Council Tax programmes, and facilitate central guidance to all Local Authorities to:

    —  achieve consistent and more detailed recording of required empty property information (and so enable more informative national research to explain why properties become and remain empty);

    —  permit greater in-house access and information sharing within Councils;

    —  enable speedier and more effective re-occupation action.

  6.5  Continuing the Council Tax theme, there is further scope for amending Council Tax exemption legislation so that these act more as a disincentive to keeping properties empty, rather than re-enforcing inertia, which is often the case at present. For example, the Government is currently considering giving Council's the power to charge full Council Tax on longer term empty properties, which in Southampton, could approximately generate up to an additional half a million pounds in revenue. But doubling the rate for more persistent offenders would be even more of a disincentive! Alternatively, a sliding scale, which progressively charges the owner the longer the property remains empty would also help achieve the desired result.

  6.6  The Inquiry is concerned about the effect of recent budget changes, which basically reduced VAT to 0 per cent or 5 per cent depending on whether a property has been vacant for 10 or three years respectively. Although too early to gauge the impact of these VAT reductions in Southampton, initial indications are that expensive renovation schemes are becoming more viable for RSLs and Councils to support. But systematic national research during 2002 would help to properly assess VAT reductions as re-occupation catalysts.

  6.7  However, Southampton's concern is that most of its empty properties are excluded from the VAT concessions, and refurbishment costs still attract 17.5 per cent VAT. To achieve more of an equitable incentive, VAT should be harmonised at five per cent for both "new build" homes and dwellings which have been vacant for over a year.

  6.8  The recent Budget also introduced "capital allowances" easements enabling shopkeepers and others to claim back the full costs of renovating potential flats and spare space above their premises against business profits. Again, local evidence is sparse given the recent introduction of these measures, but initial concerns stem from the experience of dealing with local individual shopkeepers whose business profits are often insufficient to finance necessary works in the first instance.

  6.9  The scope of the Inquiry appears unduly limited in terms of excluding consideration of the residential potential offered by disused and redundant commercial premises, (which have contributed roughly one third of EPS outputs over the last 10 years). The City Council respectfully submits that there are differing issues involved with non-residential conversion schemes—not least the difficulties in getting "over the shop" schemes to work within the Housing Corporation's funding regimes, which are grant neutral in relation to the refurbishment of existing dwellings and the residential conversion of business premises, irrespective of significant cost differentials—and that the terms of the Inquiry could usefully expand to address these issues.

  6.10  The Inquiry is also invited to consider options of promulgating best practice principles as described in paragraphs 4 to 5 above.

7.  CONCLUSION

  7.1  The scope of the Inquiry is clearly wide ranging, and it is difficult for the City Council to address every aspect within the parameters required for written submissions.

  7.2  Southampton City Council would therefore welcome the opportunity to further assist the Inquiry should the Select Committee so desire.

September 2001


 
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