Memorandum by Anna Bowman (EMP 50)
EMPTY HOMESMAKING BETTER USE OF EXISTING
This memorandum focuses on action required to
ensure that more empty homes are brought back into use for social
purposes in London and other areas of high demand. It looks particularly
at the potential use of empty property to provide accommodation
for the following priority needs groups: homeless families and
1. Introductionscale of the problem.
2. Effectiveness of government's policy
to date and areas of policy failure/neglect.
3. Need for empty property strategies at
local authority and regional level.
4. Need for new funding arrangements for
the social housing sectorrevenue and capital.
5. Empty property and regeneration.
6. Summary of recommendations for action.
1. THE SCALE
The Empty Homes Agency estimates that there
are around 762,000 empty homes in England (April 2000). 201,000
of them have been empty for over a year. They estimate that if
under-utilised properties, such as former residential accommodation/storage
above shops is included, this figure increases to 500,000 long-term
empty homes. Although many are concentrated in areas of low demand,
there are an estimated 100,000 empty homes in the capital where
demand for housing is exceptionally high. Despite efforts to reduce
the number of empty homes in London, including the use of an Empty
Property Hotline and despite a very buoyant property market, there
has not been a dramatic reduction in the number of empty homes.
Over 25,000 empty homes in London have unused for over a year.
There are also an estimated 40,000 additional homes that could
be created from under utilised accommodation, such as space above
There is an urgent need on social and environmental
grounds to take action in view of the growth of the population
in the capital, the shortage of affordable homes and the government's
desire to minimise unnecessary green field development. Action
on empty homes can play an important role in meeting two government
reducing the number of families in
bed and breakfast;
providing more homes for key workers.
Reducing the number of empty homes and planning
blight is also important in terms of urban regeneration.
There is an excellent opportunity to link action
on empty homes with the government's new Bed and Breakfast unit's
role and to meet some of the need for housing for key workers,
such as teachers and nurses. However this will depend on providing
sufficient incentives and in some cases penalties for owners to
ensure that they overcome the inertia, which has frequently led
them to leave homes empty.
There are numerous reasons for property being
left empty. In London owners are likely to leave property empty
for a variety of reasons including lack of capital to improve
the property, apathy and ignorance or fear that using it could
jeopardise or slow down a complex redevelopment scheme. As a result
different strategies and tactics need to be developed, with appropriate
incentives for both small landlords and large owners, which include
government departments, RSLs and other large agencies.
The government's policies have included a number
of initiatives to encourage owners to bring properties into use.
However, the use of separate initiatives without an over arching,
clear policy outcome or set of outcomes leads to fragmentation
and policy failure and inadequate results at a local level. The
decision to hold an inquiry into empty homes, the changes to VAT
for conversion of rehabilitated property and the establishment
of the new Bed and Breakfast unit are encouraging signs that the
government is determined to reduce the number of empty homes.
Government recognises that using empty homes
can fulfil social purposes but there a number of issues that make
implementing this strategy so difficult. These include:
The number of different owners (78
per cent of empty property is private sector owned), the majority
of whom are not professional landlords. 66 per cent of empty property
is owned by individuals.
The cyclical nature of the property
market and fluctuating levels of demand.
Difficulties in anticipating and
planning for increased/reduced demand and an understandable desire
for the situation to be kept "under control", which
has meant planning in relation to homeless families has been inadequate
and often far too conservative. This is especially so, since the
late 1990's when numbers began to rise again, after a period in
which they decreased.
Conflicting government priorities
especially around Housing Benefit, which cover the rent for most
temporary accommodation schemes and requirements for value for
money returns on government agencies' properties eg Highways Agency
The time lag between the identification
of the growth of homelessness and the development of appropriate
solutions to tackle it, especially when homelessness demands increased
in the late 1990's.
The limited number of Registered
Social Landlords with both the expertise and the capacity to take
on high levels of risk currently needed for homeless family schemes.
The lack of routine integration of
temporary uses into regeneration schemes, despite the many examples
of good practice, which could become mainstream best practice.
The following sections concentrate on those
issues that have not yet been reviewed by this government, in
relation to its objectives around empty property and homelessness,
which in the author's view, urgently need to be addressed. This
Local authority Empty homes strategiesthese
are not a statutory requirement and would be more effective if
they were. There is also a need for regional as well as local
Funding arrangements for temporary
accommodation schemesboth capital and revenue, which were
either developed during the 1990's recession (capital funding)
or have not taken into account objectives around reducing homelessness
Arrangements to use empty property
in regeneration areas and properties owned by government agencies.
3. NEED FOR
Local authorities are encouraged to establish
empty property strategies and many have them in place. The majority
of London local authorities now have empty property strategies
and officers, but they tend to be linked to other objectives,
such as environmental health and Housing Aid. The lack of a statutory
framework means that they do not have the "clout" within
local authorities and other agencies, which a statutory requirement
would provide. The benefits of this change, which the Empty Homes
Agency is lobbying for, is that it would focus the attention of
a wide range of partners in achieving results. There are many
examples, of the effectiveness of statutory strategies in other
fields, such as the Teenage Pregnancy Strategy. This raised the
profile of the issue and brought health, social services and voluntary
agencies into effective new partnerships. A similar approach is
needed in relation to empty homes.
Local authority empty property strategies will
also be more effective if they feed into a regional empty property
strategy, which provides a wider overview and will help focus
attention on major owners of empty property, whose holdings may
straddle several boroughs eg Highways Agency.
4. FUNDING ARRANGEMENTS
Empty property has been effectively used for
many years to provide temporary accommodation for homeless families
and some housing for key workers. However the arrangements rely
on there being a relatively stable and appropriate form of funding
in place to cover the rent to the owner, cost of repairs and additional
management costs, which are required for homeless families' schemes.
In the 1970s and 1980's the majority of empty property used was
local authority owned, let at peppercorn rents, with repairs covered
through a mix of small capital grants from the Housing Corporation
and local authorities and tenants' sweat equity. When this property
was eventually renovated permanently, new sources of empty property
were found in the private sector and in government agencies' estates.
Funding for repairs was available through capital grants (Housing
Corporation and local authorities) and landlords' own investment.
These schemes are more expensive in revenue terms because of owners'
expectations in relation to rents and their growth has faltered
due to difficulties in covering all the costs through Housing
Housing CorporationTemporary Social Housing
There has been a reduction in the amount of
capital funding available for temporary accommodation schemes
in London over the past few years and the number of homes produced
with this form of investment has reduced. However the benefits
are still significant, as leases are generally for six to 10 years,
rather than shorter periods.
Housing Corporation and local authority Temporary
Social Housing Funding in London 1997-2001
||Estimated number of homes
Source, The Housing Corporation
A number of reports produced by the London Housing Federation
(The Long and the Short of it) (2000); Bridging the Gap, homelessness
and temporary accommodation (1998), New Lives, New Homes (1997)
have stressed the need for a simple, flexible form of capital
funding that is targeted to bringing back into use empty privately
owned property, for homeless families use. These reports have
highlighted the complexity of current funding arrangements, which
have seen a reduction in the number of associations bidding for
that form of funding.
At a local authority level, empty property officers value
the contribution that capital grant funding makes to bringing
problematic and often long-term empty property into use. It is
recommended that the Housing Corporation and London Housing Federation
undertake further research and modelling, with a view to improving
the current funding arrangements.
Rents and Housing Benefit
The majority of properties managed by associations as temporary
accommodation for homeless families in London are ready-to-let
homes that have been leased from landlords. They are often in
property that was previously empty, through this is not always
the case. The success of these schemes, which keep families out
of bed and breakfast have been comprised by the difficulties in
obtaining Housing Benefit from local authorities and benefit contractors.
As a result, the number of RSLs engaged in this form of work has
Rents for privately owned property are inevitably higher
than for social housing, resulting in pressure on national Housing
Benefit expenditure. Government efforts to limit expenditure have
impacted on the ability of RSLs to procure temporary accommodation
from the private sector. For instance the use of local reference
rents as ceilings for leased property rents, has meant that in
some areas it is difficult to lease empty homes, as landlords
expect the "going rate" for their property. Following
the establishment of the Benefits Fraud Inspectorate in 1998,
there has been increased emphasis on creating a secure gateway
to the benefits system, which has increased the bureaucracy and
created further delays in payment. However, increased use of empty
property for homeless families will require changes to the way
in which Housing Benefit is paid. It is recommended that the new
Bed and Breakfast unit explores these problems and negotiates
5. ARRANGEMENTS TO
Registered Social Landlords (RSLs) and other agencies are
prioritising estate regeneration, in order to tackle social exclusion.
However there are substantial risks that in doing so, more property
may be empty in the short to medium term and there may also be
a longer term loss of social housing, as densities are reduced
Estate regeneration is complex, especially where property is being
demolished and rebuilt over a period of years and tenants need
to be decanted, sometimes twice, during the process.
There is evidence (Closing Doors, LHF 2000) of loss of social
housing through regeneration schemes. However there is also evidence
of good practice in using temporarily empty homes both for homeless
families and for key workers. An example of this is Stonebridge
HAT, in Brent where demolition and new building will result in
a loss of 375 homes at the end of ten years. This is necessary,
in order to create a better environment, integrated with the surrounding
neighbourhood. However Stonebridge HAT are making very effective
use of temporarily empty homes, by letting 84 to Notting Hill
Housing Trust for homeless families and 63 to Brent Community
Housing for single people, including many key workers. The HAT
benefits from these arrangements by keeping the homes occupied
and from collecting rental and service charges. It is recommended
that regional estimates be made of the potential number of empty
homes that could be used on a temporary basis in regeneration
schemes. Best practice needs to be promoted by the Government
Office for London and the new Bed and Breakfast Unit. In addition
consideration should also be given to making the effective temporary
use of homes a requirement for public funding for regeneration
schemes in London.
Empty homes owned by public agencies
The Treasury requirements for public agencies to obtain a
good return from their empty properties militates against their
use for social purposes, as it results in high rents being charged,
which are outside Housing Benefit rent ceilings. In the case of
the Highways Agency it led to properties being transferred to
private sector managing agents in 1998. However there is the potential
to use these properties for homeless families, if either rent
yields are reduced or more flexibility is introduced into Housing
Benefit arrangements for homeless families. These properties could
also be used as housing for key workers, if market related rents
6. SUMMARY OF
The DLTR's Select Committee's inquiry into Empty Homes is
most welcome. This memorandum focuses on action that can be taken
to ameliorate some of the problems in London and other high cost
areas. There is still considerable potential to improve the use
of empty and underused property. Despite high levels of demand,
there are still over 100,000 empty homes in the capital, with
a significant number empty for over a year and a similar number
of under used properties in areas such as shopping high streets.
However a number of strategies need to be in place in order to
create the administrative and funding environment in which this
The recommendations in this memorandum focus on some specific
actions, which could be taken. These are:
The introduction of a statutory requirement for
local authorities and regional government to develop empty property
A review of the capital funding arrangements for
empty property so that it can be used for social purposes, especially
temporary accommodation for homeless families and key workers.
A review of the Housing Benefit arrangements for
RSLs managing temporary accommodation schemes.
A review of the number of empty homes in publicly
funded regeneration schemes in the capital and consideration of
whether a requirement could be introduced to use these homes during
the development process.
Senior Visiting Research Fellow
University of Westminster