Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by London Borough of Hammersmith and Fulham (EMP 32)



  Hammersmith and Fulham covers just 6.33 square miles, but is the home to around 157,000 people, making the borough one of the smallest but most densely populated in London.

  Our borough is one of contrasts. Affluence and prosperity are mixed with high levels of deprivation and poverty. Strong local economic growth in the late 1990s has lead to the Hammersmith area becoming a regional business and employment centre. Many major international businesses, including the BBC and Coca-Cola have established their corporate headquarters within the borough. Property prices and private rents are the fourth highest in London, and indeed the country. Household incomes have risen sharply in recent years and are well above national average levels. Despite this the borough is classified as the 18th most deprived local authority area in England. Even this under-represents the nature of disadvantage, given that half of the census enumeration districts in the borough are in the poorest 10 per cent of all enumeration districts in England and many are in the poorest one per cent. Many wards in the borough are amongst the most deprived in the UK.

  Whilst the borough's private housing sector is larger than many other London boroughs, the proportion of this tenure which is available as affordable housing is small and under threat. The demand for affordable and below market rent housing has not correspondingly decreased and there is strong evidence from increased levels of homelessness that there is increasing demand. This means that whilst the most vulnerable can access social housing, others in housing need cannot. The options for these people are limited; however, many have managed to find housing within the private rented sector.

  Today, despite many successes and local economic success there is increasing social, economic and environmental polarisation between the majority of residents who are well housed and in well paid employment, and a sizeable population who remain on low incomes, living in unsatisfactory housing conditions.

  Current information shows that there are 4000 private sector residential empty properties of which 1800 have been empty for more than six months and 1300 for more than a year.


    —  Crime, including vandalism

    —  Blight

    —  Eyesore

    —  Nuisance/antisocial behaviour

    —  Damage to neighbouring property

    —  Detrimental effect on neighbouring property values

    —  Loss of Council Tax revenue

    —  Contributes to shortage of accommodation

    —  Contributes to increased use of bed and breakfast accommodation by Homeless Persons Units

    —  Concentrations of empty property mean reduced numbers of local customers for local businesses fueling urban decline

    —  Reduced rental income to owners damages local economy.


    —  Increased Council Tax revenue

    —  Increase in supply of accommodation

    —  Potential for additional affordable housing

    —  Potential for Housing Association Leasing Schemes, which reduce temporary accommodation budgets and provide more suitable accommodation for homeless applicants

    —  Contributes to urban regeneration enhancing local economy.


  It is hard to imagine why, in an area such as Hammersmith and Fulham with the third highest housing costs in the country owners leave properties standing empty.

  Examples of reasons given are:

    —  property inherited—beneficiary lacks skills/knowledge to manage property;

    —  complex probate cases, including difficulties tracing beneficiaries;

    —  purchased vacant as investment—owner can make profit without refurbishing and or letting due to escalating prices;

    —  speculative purchase by owner who lacks funds to redevelop and or skills/knowledge to manage;

    —  abandonment, sometimes due to age or ill-health;

    —  ignorance of options available including grants and private finance;

    —  in the case of part—occupied premises, some landlords deliberately fail to replace tenants and allow the property to fall into a state of disrepair in order to get rid of regulated tenants paying fair rents;

    —  no financial penalty for keeping property empty;

    —  empty property above shops—planning restrictions, unsuitable means of access, reluctant freeholders, sometimes low demand;

    —  costs of repair and refurbishment prohibitively expensive to many owners who have difficulty raising loans.


Budget 2001—VAT reduced rates

  It is too early to measure the effectiveness of these changes. There have only been a limited number of enquiries since the changes were announced.

Council Tax

  The law as it stands does not act as an incentive for owners of long-term empties to bring them back into residential use because of the 50 per cent reduction in council tax after six months. While charging full council tax is unlikely by itself to dissuade owners from keeping homes empty—particularly in areas where council tax charges are low—the officers are of the opinion that such a measure would make it less desirable to leave properties standing empty. A further incentive to return dwellings to residential use would be the discretion to impose a punitive charge on long-term—eg three years plus—empties. We would not, however, advocate charging the full rate to an owner who legitimately faces difficulty in bringing property back into use. Charging full council tax on empty properties would limit local authorities ability to identify empty residential properties through the council tax register.

  One of the biggest stumbling blocks to empty property work, is the restriction on councils sharing information, particularly council tax records.

  The Council Tax department of most local authorities has information regarding the ownership of every empty property in their area. However, they are unable to share this information due to data protection laws.

  There is some dispute, as to whether the restriction comes about because of Data Protection issues, or the Local Government Finance Act, which restricts the use of Council Tax Data for anything other than Council Tax collection.

  One view is that sharing information regarding ownership details would be a breach of the Data Protection Act, and not the Local Government Finance Act. Another authority has obtained a legal opinion that local authorities are not prevented by law from sharing this data.

  This is an anomaly, which must be addressed. It is absurd that two internal departments of the same council cannot share information when the common aim is the improvement of council services to the public. It is not good for "joined up government".

  Whilst the council tax register remains the best potential source of information on residential empty properties it is not comprehensive. Empty flats above shops are often charged business rates rather than council tax. Such properties are only recorded as empty if the commercial unit, usually the shop below is also empty. In urban areas such as inner London flats above shops often make up the majority of long-term empty residential properties. In Hammersmith and Fulham for example out of 1300 properties that have been empty for more than a year, nearly 1000 are flats above shops. There needs to be stricter guidance on council tax charging to enable local authorities to adequately identify and target solutions at this key area of the urban empty property problem.

Compulsory purchase

  Hammersmith and Fulham Members have given Officers authority to carry out compulsory purchase of private sector empty properties. We find it a useful tool as part of the overall strategy however most cases are resolved informally without the need to use this legal power. The inclusion of CPO's is an important element of our empty property strategy. It is, however, appropriate that such powers should be used only as a last resort and action should always be in the public interest and reflect local housing need.

  The use of compulsory purchase should form an integral part of any such strategy if it is to be effective, but must be considered within the overall framework of an enforcement concordat. A concordat approach ensures that CPOs are used in a transparently fair way, and are used only where all other alternatives are ineffective.

  We note that CPO procedure is currently subject to review and would make the following observations:

    —  we welcome the introduction of a comprehensive CPO manual and training for Compulsory Purchase Officers, as recommended by the Advisory Group reviewing CPO procedures;

    —  we would endorse the Advisory Group's recommendation of the introduction of a fast-track procedure for uncontested CPOs.

  We would welcome the introduction of measures to speed up and simplify the mechanism for resolving disputes over the level of compensation. The accrual of interest from the date of vesting means that local authorities can be faced with paying very large sums in interest where there is a long delay in agreeing compensation. A possible solution to this is to allow the local authority to make an advance payment of up to 90 per cent of its valuation immediately after taking possession whether or not the owner makes a claim for such a payment.

  One possible option which we feel could be developed further is a Compulsory Leasing Scheme which we understand is currently used in Holland. This is understood to involve the local authority seeking permission to force a lease on an empty property and undertaking refurbishment costs to make the property fit and ready for letting. The property can then be used as social housing and the fair rent, which would be paid to the local authority to pay off the cost of refurbishment. This cost would therefore dictate the term of the compulsory lease and at the end of the term the property can be handed back to the owner in a reasonable standard who has would hopefully have received the guidance and business advice to undertake the management of the property either themselves or engage the services of another, to hopefully avoid the property becoming empty again in the future. Hammersmith and Fulham is seeking permission to pilot this scheme as a freedom and flexibility as part of the Public Service Agreement

Empty Property strategies

  The priority given to empty property work and the approach of a local authority to this area of work varies enormously across the country, as does the nature and extent of empty properties.

  A requirement to draw up an empty property strategy would focus attention on the matter, would encourage authorities to take a corporate approach to dealing with empty properties and would be a useful tool in assessing the position nationally and achieving consistency.

  We would suggest that DTLR consider implementation as well as adoption of an empty property strategy.

  An important part of an empty property strategy must be a local authorities' enabling role to develop training advice and education for "amateur" landlords/owners. Our experience shows that many owners allow properties to become and remain empty because they do not have the skills to make effective business decisions. A key part of Hammersmith and Fulham's housing strategy is to improve standards in the private rented sector by equipping landlords with these skills. Hammersmith and Fulham believe that this approach will have long-term benefits in enabling landlords to return properties to use, and to avoid properties becoming empty in the first place. Prevention has got to be better than any cure. Schemes such as this need to fit into an overall strategy for the private rented sector and are linked to other initiatives such as the enforcement concordat and landlord accreditation.

  Local authorities should maintain a register of residential empty properties, changes in guidance on the use of council tax information would allow information to be derived form this source. A register would be a vital resource for local authorities in targeting their action on empty property. It would also allow better auditing of local authorities estimates of numbers of empty property.

  The current Best Value Performance Indicator relating to private sector empty properties (BVPI64) is broad. Whilst we welcome the scope that this allows for local authorities to adopt a wide range of strategies to tackle empty properties, we have concerns that it can be interpreted very differently making comparisons between different local authorities difficult, and not portraying a true picture of local authority effectiveness and performance. The indicator needs to require a stronger link between the enabler used by the local authority and the outcome of properties returned to use.

Planning guidance

  Planning guidance should contain measures to facilitate and encourage the use of empty property for residential purposes, namely:

    —  increasing the amount of land in residential use and making the fullest use of vacant or underused buildings considered suitable for residential development ;

    —  encouraging change of use to residential in buildings that are surplus to requirements.


  Hammersmith and Fulham public sector voids are among the lowest in London and performance on turn around times have improved year on year and we believe we have now reached a point where void times are so low that further improvement can only be very small.


  Hammersmith and Fulham is part of LAWNE, an alliance of London Boroughs, working to co-ordinate and promote regional mobility by allowing housing applicants voluntarily to move from London, where there is an acute shortage of affordable housing, to the Midlands and the North, where properties stand empty due to low demand.

  For some time, various London authorities have been developing links with authorities in the North in order to offer their applicants the chance to find affordable accommodation that is either not available to them at all or that entails a long stay in temporary accommodation first. We do not have figures on how many applicants have been re-housed in this way, but can advise that one London authority alone has re-housed 50 families.

  This strategic approach to matching low—demand properties to applicants in areas of high demand is a good example of how joint working can help provide creative solutions to problems of supply and demand, allow greater choice to housing applicants and reduce expenditure on temporary accommodation.

September 2001

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