Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by the Local Government Association (EMP 53)


  The Local Government Association (LGA) was formed from the merger of the Association of County Councils, the Association of District Councils, and the Association of Metropolitan Authorities on 1 April 1997. The LGA has just over 500 members. The membership now includes every local authority in England and Wales: 238 shire district councils; 36 metropolitan district councils; and 22 Welsh authorities. In addition, the LGA represents fire authorities and passenger transport authorities and works with police authorities (as the Association of Police Authorities). The LGA provides the national voice for local communities in England and Wales; its members represent over 50 million people, employ more than two million staff and spend over £65 billion on local services.


  The Local Government Association welcomes the House of Commons Select Committee Inquiry into Empty Homes and the opportunity to present evidence. The LGA has been engaged in a number of initiatives with its member authorities and other partner agencies in both the public and the private sector. We would welcome the opportunity to address the Select Committee. We gratefully acknowledge the contribution of all authorities in particular those of Camden, Rotherham, Ashfield, Lambeth, Oldham, Mansfield, Hull, Manchester, North Wilts, Telford and Wrekin, Newham, Slough, Hartlepool, Sheffield, Harrogate, Brent, Plymouth, Amber Valley and also the Sussex Empty Homes Forum and Derbyshire Fire and Rescue Service.


    —  local authorities should have the power to charge full council tax on empty homes or even a premium where it is clear that homes are being kept deliberately empty;

    —  VAT should be equalised between new build and refurbishment;

    —  Consideration should be given to an increase of VAT on Greenfield site development;

    —  Strategic housing responsibilities should be more clearly defined in legislation. This should include an empty homes strategy but an empty homes strategy by itself will continue the somewhat piecemeal approach, which prevails currently;

    —  a number of authorities are involved in innovative schemes to bring empty homes back into use. These Schemes will need to be appropriately resourced, through additional central government funding, if they are to achieve their full potential;

    —  ensure that the issue of empty homes features at the regional level by involving regional planning and regional development agencies;

    —  permit compulsory purchase in order to tackle empty properties, in areas of low demand, where this is within an established regeneration strategy;

    —  consider the use valuation from a District Valuer to be acceptable for onward disposal. This will assist the efficiency and speed with which properties might be brought back into use;

    —  consider guidance to make clear that authorities may use Council Tax information to facilitate an Empty Homes Policy. Currently some councils believe that Data Protection legislation prevents them from doing this;

    —  undertake the licensing of the whole private sector.


Why so many homes are left empty

  The reasons why so many homes are empty are numerous and complex and both micro and macro economics play their part. The reasons may be personal and concerned with family breakdown, dispute or tragedy. They may be concerned with the changing nature of people's expectations although this is by no means straightforward. Terraced property that in one part of the country may be empty, no longer popular even as a starter home and for sale at less than five thousand pounds will be considered highly desirable elsewhere in the country and will sell for over two hundred and fifty thousand pounds.

  There may be issues of disrepair with freehold owners unable to pay for the repairs that would bring the property back into use. Despite this the owner may remain unwilling, for whatever reason, to sell the property. Alternatively even where a sale and purchase is completed the new owner may be seeking only a capital investment and may have no intention of improving the asset but may seek capital growth without expenditure.

  There may also be a fear of renting, for landlords, and of the consequences of attracting undesirable tenants or there may be a belief amongst some landlords that the financial gain from renting is insufficient to justify the difficulties in managing the property. Where negative equity is an issue a landlord may elect to wait for an upturn in the market. Although this assumes that there is the possibility of prospective buyers and in some parts of the country this is not the case.

  There are also situations where practical realities counter bureaucratic practices and initiatives fail as a consequence. For example the various flats or spaces over shops initiatives. For owners of such properties the benefits will clearly be seen in increased rents. However, shop rents are consequently reduced while insurance increases. There is also the risk of water or radiator leaks from the property above, vandalism to the property and increased risk of theft, which may all play their part in dissuading owners from entering into such schemes.

  In parts of the midlands, north, north east and north west large areas have seen property values plummet leaving many families with mortgages of thirty thousand pounds or more on properties worth a fraction of their original purchase price. Families desert, hand over the keys to their mortgage companies or are re-possessed. The mortgage company may then find that they have a non-disposable asset as, in many areas, the market decline has reached the point where properties are unsaleable. This phenomenon is more properly known as "low demand". However the resulting empty properties, although concentrated, still result in all the negative aspects identified above. One estimate has put the total value of such property, across the midlands, north, north-east and north-west at nearly ten billion pounds. Its significance should not be under-rated.

  In these areas the LGA has been working with a number of local authorities plus the Council of Mortgage Lenders, Treasury, Financial Services Authority, Department of Transport, Local Government and the Regions to develop a number of innovative schemes to tackle the issue at both a personal and a strategic level. We strongly recommend that the Select Committee give time to examine this work and its implications nationally. The importance of the work taking place should not be under estimated.

  A further reason for homes being empty revolves around issues of care. Older People going to live with relatives, long term hospitalisation or even prolonged intermittent hospitalisation can all play their part in the deterioration of a property.

  Further problems may arise the issue of legal title is in dispute or where probate is in question. These issues may take years to resolve with the property declining in appearance as a consequence.

  There is a view in some authorities that RSL's prefer to concentrate their efforts and funds on new developments rather than invest in refurbishing individual properties. Some RSLs may be interested in leasing properties that are structurally sound and in good internal order. These they can rent out straight away but as the schemes frequently offer less than market rent the schemes may not be popular for owners.

  Finally, some of the older housing remains situated in places that would, today, be considered inappropriate for residential use. This is property that remains close to heavy industry, busy arterial roads or motorways or close to dump sites or sewerage works.


  Some major Government initiatives in this area have been welcomed. For example the reforms to the existing private sector renewal legislation (Housing Grants, Construction and Regeneration Act 1996, Local Government and Housing Act 1989 and Housing Act 1985) have assisted local authorities by increasing the range of options available to them. Previously legislation had appeared both rigid and limiting. The reforms proposed, yet to be ratified through parliamentary process, will assist authorities to embark upon policies focused on local needs. This gives the opportunity for creativity and innovation in areas of policy such as empty homes. What it does not give is the financial resources to make such innovation a reality.

  The addition of a low demand indicator, as proposed in the consultation paper "Allocation of housing capital resources: needs indices" is welcome.

  Data protection issues are, in some authorities, hampering work to bring empty properties back into use. The Council Tax section of an authority will hold the appropriate information on the addresses of empties and the names and addresses of the owners. However due to Data Protection, some Council Tax sections will not pass this information to the section dealing with empty homes. The matter appears to require clarification and if it is the case that information can be passed through then guidance to that effect would be useful.


  In its publication Vision into reality—the future strategic housing role of local authorities (ISMN 1 84049 212 0) the LGA points to the importance of local authorities adopting a strategic housing role within the changing context that local authorities face. The issue of Empty Homes is, for many authorities, a central issue but one that can only truly be addressed within this broad strategic framework. Local authorities will need to:

    —  Integrate their Empty Homes and Housing Strategies within the developing community planning framework that arises from the new power to promote the social, economic and environmental well being of their communities. This will also need to be extended to include local strategic partnerships as proposed in the government's National Strategy for Neighbourhood Renewal.

    —  Link and contribute to the growing importance of regional housing strategies and the work of regional planning bodies and regional development agencies. This will be an important step in ensuring that the issue of empty homes is looked at within a regional context.

    —  Ensure the principle of sustainability underpins all interventions.


    —  increased dereliction and a sense of depression, area neglect and decay;

    —  eyesore, which can drag down the value of surrounding areas;

    —  vandalism, arson attacks, increased rubbish dumping and rodent complaints;

    —  squatting;

    —  increased crime;

    —  both business users and residential investors are reluctant to invest in the area;

    —  increased deterioration in the appearance and fabric of the property;

    —  loss of capital investment through low commercial rents leading to low re-investment leading to further decline;

    —  failure in lower levels of sustainability;

    —  greater dependency by the local authority in "bed and breakfast" solutions to housing shortages;

    —  greater risk of serious crime as overgrown gardens, attached to empty homes, act as a screen and a haven for attacks—predominantly on women; empty properties are also known to be used in connection with rape attacks and can also become places where drug users congregate;

    —  greater calls on the police and fire service resources.


  Provided the empty properties strategy is couched within the strategic terms discussed earlier an empty properties strategy may:

    —  reduce crime both on property and the person;

    —  cut vandalism and the opportunity to engage in it (this, in particular, needs to be linked to broader, strategic, objectives);

    —  significantly improve aesthetic aspects of the community and the confidence to be part of the community;

    —  improve the value of surrounding property and thereby increase the attractiveness for private investment;

    —  reduces the need to build new dwellings on greenfield sites;

    —  employment opportunities may be created both in terms of local private sector building companies and in terms of training and refurbishment;

    —  will increase revenue to the council through greater Council Tax income. Potentially sufficient to more than pay for both the strategy and a full time officer;

    —  has the potential to bring back into use properties which may relieve pressures elsewhere in the housing market, for example in the student market;

    —  improves the overall condition of the housing stock;

    —  enables councils to obtain old debts—such as Council Tax—either by the sale of the vacant property or by the council identifying and tracing owners;

    —  gives greater visible evidence of a council's strategic policy in areas of decline.


    —  It is established LGA policy that full council tax should be charged on properties that are being kept empty by the freeholder.

  Some authorities have gone further than this by suggesting that even at 100 per cent there may be insufficient incentive to persuade owners to bring their properties back into use. These authorities suggest that consideration should be given to increasing the tax on empty properties to 200 per cent after a given period. It is recognised that there will be general exemptions from this, for example property owners who are in care, in prison or hospitalised for prolonged periods.


  Some authorities have suggested that VAT should be equalised between new build and refurbishment and there is an argument to increase VAT on new homes on greenfield sites. This will provide an incentive to invest in refurbishment or new build on brownfield sites.


    —  It is established LGA policy that compulsory purchase should be permitted in order to tackle abandoned properties in areas of no demand, where this is within an established regeneration strategy. Also that compulsory purchase powers should be extended to cover rented property, which has been let irresponsibly.

  A number of authorities have suggested that the current statute which requires a local authority to prove CPO action is a "last resort" is very difficult to prove in law. One authority gave the example where despite a site being left vacant and derelict from some seven years the local authority failed to prove to the satisfaction of the Secretary of State that CPO action was necessary. On that basis it would be possible for an owner to keep renewing planning applications and never developing the property or site. Taking into account Human Rights issues it is not surprising if authorities, as a consequence, regard the CPO process as lengthy, time consuming, expensive and complicated.

  Other authorities are loathed to embark upon a CPO process, as the costs of the action are considerable. These costs include all of the preparatory works, the costs of representation and for the actual Public Local Inquiry all fall to the Council, even when the objections can be spurious ones from third parties.

  A problem for inner city authorities, as highlighted by Newham, is the issue of onward disposal. The Notice to Treat procedure is not considered appropriate for use with vacant properties because property cannot be disposed of until compensation has been agreed. The impact of this, in real terms, is that the property may remain empty for two years or more as the various procedures involving Lands Tribunal are gone through.

  Authorities have, on occasion, used the General Vesting Declaration where the property is sold on quickly in order to bring it back into use. However this could place an authority in a difficult position where the value negotiated with the owner turns out to be greater.

  A possible solution to this would be for a valuation from a District Valuer to be acceptable for onward disposal, with the protection that an owner could appeal within 21 days to a County Court.

  We would also wish to highlight an issue that the London Borough of Newham has raised.

    "Some Criminal elements are abusing the information that Councils have to publish in local newspapers announcing that they intend taking CPO action. These elements break into properties and carry out rather poor refurbishment with a view to obtaining "adverse possession" of the properties after a period of 12 years. Some are renting these properties out to innocent individuals at normal market rents through newspaper. This seems to be happening in around 15 per cent of Newham's CPO cases. We know of instances where private firms of solicitors acting for clients in probate cases are experiencing similar difficulties."

  Authorities have also suggested that where owners cannot be traced/are dead and either has disinterested next of kin or no next of kin at all, and a property is clearly squatted, Local Authorities should have powers to compulsory purchase. Currently there is a lack of sustainability and legislative controls on squatters.

Should a Statutory Duty be placed on Councils to write an Empty Property Strategy?

    —  It is established LGA policy that local authorities strategic housing responsibilities should be more clearly defined in legislation. Having an empty property strategy needs to be related to broader housing issues.


  The reasons for homes being empty are many and diverse and have a strong regional element to them. Because of this we would respectfully suggest to the Select Committee that they hold regional meetings to allow the committee to view the issues at first hand and to allow focused presentations from interested parties including those who currently live in areas where there is a high level of Empty Homes.

September 2001

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 24 October 2001