Select Committee on Transport, Local Government and the Regions Memoranda


Memorandum by The City of Westminster (EMP 36)

EMPTY HOMES

INTRODUCTION

  The City of Westminster has had an Empty Property Strategy since 1995.

  Using a number of methods, including a comprehensive compulsory purchase programme, 500 units of accommodation have been brought back into use.

  However, as at 1st April 2001, according to Council Tax figures, we still had a total number of 2,378 empty properties, 1,610 of which had been empty six months or more.

  The City Council has a dedicated full time Empty Property Officer who previously worked at the Empty Homes Agency as local authority executive. This role involved training empty property officers within local authorities. The postholder currently serves as the secretary of the National Association of Empty Property Practitioners, chair of the Central London empty property officers group and has also acted as a consultant to the Greater London Authority on its London Empty Property Strategy, the DTLR, and several private sector bodies.

  The City Council also has a dedicated full time compulsory purchase manager, who has 20 years experience of CPO'S, and is a lead authority on compulsory purchase issues surrounding empty homes. He has developed a strategy that responds to the nature of the market in Westminster with large properties having complex ownership. In the last five years the City Council, has compulsorily purchased 45 properties, leading to 234 units of accommodation being brought back into residential use.

  We will not comment on areas outside of our experience, such as low demand, and will speak generally around some of the policy areas.

Local experience

  The experience in Westminster of the consequences of empty homes has centred mainly on the nuisance factor. Complaints are often received from members of the public expressing concern that property is empty. These concerns relate to rubbish accumulation, and the negative effect on house prices, as well as concerns about the waste of valuable residential resources.

  The benefits of bringing empty property back into use are numerous. In Westminster, they include: provision of much needed temporary and permanent accommodation for homeless families; removal of eyesores and crime risks; and increase in Council Tax receipts.

  It is difficult for the City Council to obtain property for temporary accommodation purposes, due to the exceptionally high value of property and the higher than average rents available to owners in the private sector.

  The City Councils CPO programme has been held up by both the DTLR and the GLA as an example of good practice.

  The question as to why homes are left empty in Westminster is difficult to answer considering the high value of properties in the City. However, they appear to fall into the following main areas:

    —  large family-owned estates, who seem to have such vast estates that leaving a few empty is of no concern to them,

    —  landlords who own only a small number of properties, who buy speculatively but who do not have the resources or knowledge to finish the scheme,

    —  properties that have been abandoned or which are subject to probate due to the death of the owner, or family breakdowns/disputes.

  Particularly because of the last two reasons, there will always be a number of empty homes in Westminster, even if proportionately, the amount is lower than in other parts of the country.

  Added to this, is the fact that owners often have unrealistic expectations with regard to their property, feeling that it is worth more than it really is, or can achieve higher rents than can be reasonably expected. This is a major problem, as owners often keep property empty either waiting for prices to rise, or whilst they try to attract tenants at the rent level they want. In the mean time, the property can deteriorate or be the subject of vandalism.

  Having the authority to be able to take strong enforcement action is crucial. This is why a compulsory purchase programme is vital to the success of our strategy.

Changes made in the 2001 Budget

  It is a little early to comment upon the effectiveness of the measures brought about by the 2001 budget. Certainly in Westminster we have not seen a huge increase in activity due to these measures, however, we are currently reviewing our empty property strategy and will be looking at ways to publicise these measure more effectively.

  Also, builders and developers have access to this information from their own sources, and will not always be working with the empty property officer. Therefore, it will be quite difficult for officers to quantify the effect of these policies, it is hoped that the results will be seen for themselves in an overall reduction in the figures of long term empties over the next few years.

Requirement to publish an empty homes strategy

  It is the view of this authority that it should be a statutory duty for authorities to produce and implement a strategy.

  Anyone can produce a strategy and tick a box stating so, however, putting it into action is another matter.

  The requirement to produce a strategy under the Home Energy Conservation Act 1995 provides a good example. In most instances, the strategies adopted by local housing authorities to achieve a 30 per cent improvement in domestic energy efficiency involve a scale of measures that are extremely challenging, particularly in respect of the tenures over which they have no direct control. Most local authorities are failing to fully implement their strategies and there exists a dislocation between these strategies and the resources made available by central government to implement. Perversely, there exists no statutory duty to fully implement these strategies.

  At present, the assessment of a local housing authority's policy and performance in respect of empty homes forms part of the overall assessment of an authority's performance by the regional office of the DTLR. If the implementation of a strategy is to become a statutory duty, it is necessary that this be adequately funded.

  It is important that the funding of empty homes work is made as transparent as possible. This is by no means an easy task given the various funding sources that exist through the Housing Corporation and the Regional Offices that impact upon empty homes work.

    —  funding solutions to be made clearer;

    —  empty Property Strategies to be compulsory, and monitored for effectiveness by Government.

Council Tax

  Westminster City Council believes that it would be justifiable, and indeed would welcome legislation, that allows them to charge full council tax or indeed punitive levels, on long term empty property. This would remove the perverse incentive that owners now currently enjoy to keep property empty.

  However, we would like the discretion to reduce this charge where the imposition of the full charge is iniquitous. For example, we would not want to charge the full-rate to an owner who legitimately faces difficulty in bringing property back into use. Similarly, being able to impose a punitive charge of 150 per cent in the case of dwellings that have remained vacant for very long periods of time, say, over 3 years, may act as a further incentive to return the dwelling to residential use.

  One of the biggest obstacles 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.

  The City of Westminster Council Tax department takes the view that sharing information regarding ownership details would be a breach of the Data Protection Act, and not the Local Government Act. Indeed, it is their view that section 111 of the 1972 Act, and sections 2 and 3 of the 2000 Act DO give powers to the authority to share such information.

  Whatever the reason, it is an anomaly, which must be addressed. It is ridiculous 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 doe not suggest "joined up government".

    —  The issue of Council Tax departments sharing information about owners to be resolved.

    —  Power to charge full or punitive Council Tax on long term empties.

Compulsory Purchase Orders

  Our CPO policy closely mirrors that of successive Governments over the past 20 years, and can be summarised as follows:

    —  CPO's are only used as a last resort and in the public interest.

    —  CPO's are not implemented, even in the late stages of the process, if owners give time limited, binding undertakings to carry out improvement works and return properties to residential use.

  The City Council has operated a highly successful CPO policy for many years. This has achieved many notable successes ranging from the refurbishment and return to residential use of individual properties to the redevelopment of a brownfield site providing 110 new units of accommodation for a mixture of social rented housing and shared ownership.

  Westminster published a CPO procedure guide in September 1998, which has been purchased by over 120 local authorities. Feedback has been excellent and the guide received widespread praise from, among others, the Empty Homes Agency. In July 2001 the guide was made freely available through the HouseMark web site whose validation panel assessed it as "leading edge good practice".

  City Council officers have given presentations on CPO's to Empty Property Fora across the country and regularly respond to requests for help and guidance on CPO's from other local authorities.

  In December 1998 officers contributed ideas to the Urban Task Force on how CPO procedures under Housing Act powers might be simplified and streamlined, and also made major contributions to two recent consultation exercises initiated by the Government in relation to CPO's. In March 2000 extensive comments were made on the housing section of a proposed CPO manual commissioned by the former DETR. In October 2000 we gave a detailed response to the final report of an advisory group set up by the DETR to undertake a Fundamental Review of the Laws and Procedures relating to Compulsory Purchase and Compensation.

  CPO's bring about a change of ownership to properties where landlords have proved unwilling or unable to bring empty housing accommodation into residential use to new owners willing and able to do so. As well as the qualitative and/or quantitative housing gain that this achieves, the transformation of badly managed, often visually offensive empty properties to improved permanent homes for residential use has a marked impact on:

    —  the local environment;

    —  quality of life for local residents and people who work and visit in the area;

    —  perception of the work carried out by local authorities.

  In the City Council's view the use and threatened use of CPO's must be closely aligned to, and form an integral part of, any Empty Property Strategy. The CPO policy should be well publicised so that owners of long-term empty properties are fully aware of the consequences if they fail to return bring properties into residential use by voluntary means.

  If an effective and robust CPO policy does not exist it is inevitable that some owners will ignore a local authority, safe in the knowledge that no further action will be taken. This is unfair to owners who do bring their empty properties into use voluntarily. The absence of a CPO policy will also ultimately bring the empty property strategy as a whole into disrepute, because it will be seen to not deal effectively with the worst abuses.

  The City Council believes that, in general terms, the existing procedures relating to CPO's work well. However, the City Council shares the Government's view that the laws and procedures are unwieldy and complex and that this has led to a situation where the vast majority of local authorities have little or no expertise or experience of CPO's and are therefore reluctant to use them. The current review designed to streamline and simplify the procedures and make them easier to understand and implement is therefore welcomed.

Perception

  CPO's have long been perceived in a negative light and this has fuelled reluctance amongst local authorities to use them. CPO's need to be projected in a far more positive way, particularly highlighting the major contribution they can make to the overall success of Empty Property and Regeneration Strategies.

  The City Council strongly advocate that when local authorities adopt or review empty property strategies they should make it clear that the use of CPO's will form an important part of that strategy and will be vigorously pursued where appropriate.

Funding

  There is a common misconception amongst local authorities that CPO's are costly and cannot be accommodated within capital expenditure programmes. The special funding rules that apply to CPO's, which ensure this is not the case, need to be spelled out in clear terms.

Training

  Many local authorities have, at best, only limited knowledge of CPO procedures and practice. If, as in Westminster, CPO's are seen as an essential complement to a successful empty property strategy, it is imperative that training programmes are put in place so that relevant staff can develop understanding and experience in this specialist function which involves a long learning curve.

CONCLUSION

  In conclusion, the City Council welcomes the Select Committee's interest in the subject of empty homes, and are confident that Westminster are doing much of what may be reasonably expected of our authority to tackle this problem.

  The City Council hope that the recommendations that the Committee might make at the end of their enquiry, will facilitate the necessary changes to enable the nation to reduce the number of empty homes down to the lowest level commensurate with the efficient operation of the housing market.

Paul Palmer

Empty Property & Compulsory Purchase Officer Housing

September 2001


 
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Prepared 24 October 2001