Tackling the Problem of Empty Houses | Lord Greaves in House of Lords Debate
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Here is an edited version of a speech I made on Day 2 of the committee stage of the Housing and Planning Bill in the House of Lords. I had made a proposal to require the government to “commission a review of the operation and effectiveness of empty dwelling management orders and other provisions for bringing into use domestic properties that have been abandoned by their owners”. I got no sensible answers from the government but will pursue it further!
Housing and Planning Bill Committee Stage Day 2
My Lords, my purpose in moving this amendment is to raise a significant problem in some parts of the country. I am very aware that the kinds of areas I am talking about are very different from the areas that the Bill seems to be concentrating on—in London and the south-east and similar areas. The sort of areas I am talking about are, for example, east Lancashire or west Cumbria, and lots of other places like those. It is a different world.
One Size fits all Legislation
There is not one housing market in this country that is the same everywhere. There are many different housing markets in different places which operate in different ways. The real problem that many of us have is that legislation is on a one-size-fits-all basis and is written by people with a very south-east England viewpoint.
There are other housing markets outside of London?
I am talking about areas with a housing market that is fragile and stagnant. It was identified some 15 years ago now by the then Deputy Prime Minister, now Lord Prescott, as a market failure. A scheme was set up by central government for housing market renewal targeted at these areas. That was swept away in the early years of the Coalition. There is now no real attempt to look at these areas and implement different policies for the different conditions. We are talking about areas mainly consisting of terraced housing that is 100 or 150 years old, some of it in really good condition now as a result of the efforts that have been made over the years, and some of it in poor condition.
Examples of different markets – Housing in Pendle
I know best the borough of Pendle; the situation is worse in Burnley but the same in Accrington and many similar towns. You can buy a terraced house which is habitable but in not-very-good condition for between £30,000 and £50,000. In good condition in a less-popular area, the prices are £60,000 to £80,000; in more sought-after areas in towns, £80,000 to £100,000. The rest of the housing market is depressed as a result. And there is a real problem of abandoned houses. These are not houses abandoned by the owners. They are empty—they might be boarded up if there is a decent council—and they might be derelict inside. They might have been stripped out by tenants at some stage in what is known as a “moonlit”, or moonlight flit.
I can speak for my borough but I know that this applies to a lot of others as well. A lot is being done about empty homes through a combination of carrots and sticks. Much of what is being done is being done with the help of national government. In my own borough of Pendle, the number of empty houses has been reduced from 2,000 to 1,300 in the last couple of years. Of the 1,300 about a third have been empty for more than two years.
What can be done to solve the issue?
There are a number of things that can be done and we have certainly done. We have set an empty-homes levy whereby, after two years, we are levying an extra 50% on top of the normal council tax, so they are paying 150% council tax. We have directly intervened in a number of streets using our joint venture company or a housing association, and that has rescued and improved 80 to 90 derelict houses in the last couple of years. Like many councils, we have an empty homes officer working on individual houses and owners. It is intensive and expensive work, but it works by targeting the owners and talking to them. We have a system of loans to the owners of these houses, which started off with the government-sponsored empty homes clusters programme, where we will provide a loan of up to £15,000 per house. That works well, and the repayments go back in the pot for more loans. Many things can be done and different councils will deal with this in different ways. We are down to 3.3% empty houses but they are concentrated in areas, particularly those with a lot of cheap private rented properties.
However, the acute problem is not that but individual houses that have been effectively abandoned by the owners. They are often scruffy, boarded up and stripped out—if not by the previous tenants then by other people nicking all the copper and everything else. These are what we call rotten-tooth houses and they have a disastrous effect on streets whose future is in the balance. Local authorities spend a lot of time and resources trying to save them.
In the past, we used powers of direct intervention, particularly compulsory purchase orders, as a last resort. We used to do perhaps nine or 10 of those a year in our fairly small authority. However, that was powerful because everybody else knew that that was in the wings if they did not sort themselves out. In many cases, that led to voluntary sales to the council. We had a regular, annual programme of improvement for sale. The problem was that the money never stacked up. The cost of acquisition plus the cost of renovation to proper public sector standards was less than you could get in a depressed housing market. Therefore there was a gap.
That gap was filled from the council’s housing capital programme, most recently from the housing market renewal funds and the regional housing pot as it was officially called. Both those have now gone. For councils like ours throughout Lancashire and the north of England, the housing capital programme does not exist any more. Then we went on to back-to-back schemes with housing associations. The council would compulsory purchase, do the work and sell on to the housing association, or perhaps the housing association would do the work. That is now no longer viable and cannot be done so we looked again at Empty Dwelling Management Orders.
How does an Empty Dwelling Management Order work?
I remember debating EDMOs in this House when they first came in, in the Housing Act 2004, and we thought they would be a great thing. They have been around for about 10 years. They were a great hope. What happens is that the council takes over a long-term empty house, repairs it to make it habitable and then lets it to a tenant. The income from the rent is put in a separate account for that house and offset against the cost of the initial renovation plus the continuing cost of repairs and management. However, that does not add up in areas of low rents, particularly if it is only a one-year interim EDMO, where the owner can reclaim the house and the council loses all the money. After the end of the EDMO period—I think the ordinary period is seven years—the owner gets the house back. It is just given back to them, and if there is a deficit on the account for the house—as there will be—the council carries the can.
So we have a situation where we have rotten-tooth houses which we were, like many councils, brilliant at dealing with, thereby saving streets. However, CPOs and EDMOs do not add up any more, housing associations are not interested any more and the councils have no resources to fill the gap. This is a plea to the Government: please, what can we do to tackle these very real local problems?
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