Thursday, April 27, 2006

An Easier Way to Buy Empty Homes

If you owned an empty home and you had no imminent plans to fix it up and rent it out you might very well be tempted to sell it. After all, the empty home is bringing in no income and in all likelihood is costing money. In most parts of the UK the property market is pretty flat at the moment meaning no increase in capital value either. The logic is obvious, but the reality different. Most property owners who see the logic have already sold, those that are left have other motivations or perhaps no motivation at all.

Introducing an extra obstacle and expense to selling property might not be the best way to encourage unmotivated owners to sell their property. But next year the government is introducing home information packs (sometimes called seller’s packs) as this rather good new website explains

The Home Information Pack is a set of documents providing important information about a property such as searches, copies of the deeds and a new document called the Home Condition Report, which assess the condition of a property and its energy efficiency. From 1 June 2007, all home owners in England and Wales will need to prepare a Home Information Pack before putting their home up for sale”. (They’re planned for January 2007 in Scotland)
The seller will also need to pay for it and the government thinks that costs “will be of the order of £600-£700”

The government point out that these cost are not additional and may not have to be paid until the property is sold. All true, but they're costs that are currently borne by the buyer so they are new costs for the seller. This could be a problem, nothong puts the reluctant seller off like a fat bill. But the market is quick to spot an opportunity and nobody is quicker at the moment than the supermarkets. Asda has got in there first and is piloting a low cost estate agency with free home information packs. Free home information packs really are a good incentive, if this idea catches on it far from being a disincentive it may even encourage more unmotivated owners onto the market.

Wednesday, April 26, 2006

At the End of the Empty Property Rainbow

Getting to the day when local authorities can finally use empty Dwellings Management Orders has been a bit like chasing the end of a rainbow. Whenever you think you've got there it magically jumps ahead of you again. The Housing Act was given Royal assent back in November 2004, but the powers were only usable once a commencement order had been passed. This was due in autumn 2005, but slipped into 2006. When the regulations and commencement order finally arrived on April 6. It enabled the parts of the act relating to EDMOs. Well nearly all of them - it turns out that one section (section 134) was not enabled. This section gives Residential Property Tribunals the power to issue interim EDMOs. Without it none of the rest of the EDMO powers are usable. Section 134 it turns out is just delayed a bit and will be enabled on July 6. When this happens we will finally be there.

What then? Well local authorities won’t be on their own - a series of events and publications are planned for early July.

Firstly the ODPM will be publishing a technical guidance note offering interpretation of the act and the regulations.

Secondly the Empty Homes Agency and IDE&A will be publishing a guidance booklet on astrategicc approach to empty homes showing where EDMOs fit within the large range of methods of getting empty homes back into use

And thirdly there will be a series of regional seminars with free places for local authorities offering advice and good practice.

Tuesday, April 25, 2006

A Couple of Enhancements

You may have noticed that I have deleted a few comments that have been left on this blog. They’re not the rude ones (they’re still there!) but this blog is now old enough for the spammers to have found their way to it. To save them clogging up the site I have added a couple of enhancements. The first means that you need to register to leave a comment. I can see that readers of this site seem to like to remain anonymous, that’s fine. You can register in what ever name you like and it only takes a few seconds. The second change is word verification when you leave a comment you will see a series of letters written in wobbly font you just have to type them out in the box. It’s easy to do but computer generated spam, pingers etc can’t work it out. I know some people have had trouble registering with this site. If it’s not working for you do let me know via email by clicking on my profile at the bottom of the page.

Monday, April 24, 2006

DIY Empty Homes

Big organisations have a tendency to believe that only they can solve the housing crisis. Government thinks this, Regional government thinks, local authorities think this, big house builders think this, big housing associations think this. Of course they all play a very important role but we forget at our peril that by far the most influential player isn’t any of these, it’s the house-buying public. They buy millions of houses every year, they sell millions of houses every year and they sit on wealth that only be measured in trillions of pounds. Even small changes in their buying trends and attitudes have huge impacts on housing demand. With that in mind this survey reported in the Telegraph last week was highly significant. The survey found that:
41 per cent of the population would consider buying a property that required major work” Challenging the assumption that most people only want a squeaky new house. Of course people have different views of what amounts to major work, but even here the survey suggests that the public is more prepared to take on a wreck than we give them credit for:
75 per cent of those willing to buy a run-down home happy to buy a house with no central heating. Over half would consider doing extensive replastering, and a quarter would take on a home with damp problems.”
Given that most empty homes require a fair amount of work the survey supports what we have been saying for a couple of years. The property buying public has a huge part to play in bringing empty homes back into use. They have the money to buy; they are willing to do the work. They just need some help in finding suitable properties and persuading the owner to sell. If the big organisations really want to make an impact on empty homes they could do worse than help house buyers with these two problems

Friday, April 21, 2006

Key Worker Homes Lying Empty

Stories about key worker homes lying empty have been rumbling on in the local press for a few months now. This from Milton Keynes earlier this week talks about a key worker development where only 20 of the 100 homes are occupied.

Deputy leader of Milton Keynes Council Labour group Kevin Wilson put it like this: "It is, frankly, frightening in a city where there is so much housing need to see so many places lying empty."

Key Worker Living was launched in March 2004 replacing the old Starter Homes Initiative. The programme was designed to help up to 12,000 key workers into home ownership over two years, and to keep key workers in the job that they have trained for. Housing Associations have been encouraged to develop ear-marked key worker developments. And there may lie the problem. This report from the current edition of Personnel Today reports a Liberal Democrat view that key workers do not want to live in public sector ghettos.
Nobody denies that there is a problem. Households living off public sector salaries can't afford market prices for housing. But unlike the homeless who live where they are put by councils and housing associations, key workers can exercise choice. If they don't like what they are offered they won't live there.

The government play down the problem But what ever the rights and wrongs these sorts of stories do nothing to convince the public that millions of new houses are needed. And perhaps augur badly for what might happen if future new developments are badly planned. Just because there is housing need it doesn't follow that people will live anywhere. Badly planned houses become empty houses.

Thursday, April 20, 2006

The Blog Clock

In the United Nations headquarters in New York there is a clock (now much copied) measuring the world’s population. It’s mind boggling to look at it seeing the number of humans on this planet increase like the pennies on a petrol pump gauge at a filling station.

There isn’t an equivalent clock for the increase in the numbers of blogs, but Technorati’s quarterly reports get close:
By me writing this and you reading it we are contributing a tiny way to the most extraordinary phenomenon. There are now 35 million blogs in the world and 75,000 new ones are created every day. Many of them only last a few months and many are barely worth reading, but that doesn’t detract from the fact that this is the biggest change in communications since the birth of the internet itself. Everybody can be a journalist an editor and a publisher all at once and it’s instant.

As far as I can see “Unlocking the Potential” is the world’s only empty homes blog. but I could be wrong and a new one could be one of the 75,000 created today. It’s an exciting new frontier.

Wednesday, April 19, 2006

A Home For the Price of a Ford Fiesta

Britain's most popular car the Ford Fiesta costs around £12,000. For the same money you could create a new home.

Last year the government ran a competition challenging house builders to build 1,000 houses for just £60,000 each. To many that sounded too cheap to be true, but in a report released in January the GLA has thrown open the possibility of the £12,000 house.

The GLA’s report took a close look at the condition of London’s 83,000 privately owned empty homes. Compiling data from private sector house condition surveys carried out by Fordhams Research over the last 5 years in 15 London boroughs, the authors were able to quantify the condition and likely renovation costs of empty homes in the capital. The results make fascinating reading for everybody concerned with housing supply, and challenge assumptions held by many in the field that developing empty homes is an expensive business. Amazingly the average repair cost was just £6,800 and for long-term empty homes (those empty for more than 6 months the cost was just over £12,000.

The costs were estimated for improving each home to a good state of repair; a standard somewhere around or above the government’s decent homes standard. As you might expect empty homes were generally in worse condition than occupied houses; but perhaps not in as bad a state as you might expect. Whilst there were, no doubt, a few complete wrecks that would cost tens of thousands to restore, most were just a bit run down. Typical repairs included fixing leaking roofs, overhauling windows, replacing bathroom suites and kitchen units. The report tallies with similar survey carried out in Kent last year that showed average repair costs of between £5,000 and £10,000

To understand what’s going on perhaps we need to look at another piece of research on empty homes from a couple of years back. MORI carried out a questionnaire survey of owners of empty homes in London. They asked why their properties were being left empty and what it would take to bring them back into use. Results indicated that the major reason that homes were being left empty was because of their condition. Reasons given included “I can’t afford to repair it” “I am planning to renovate it” “the property is unlettable or unsaleable in its current condition” In other words thousands of homes are held away from the market because owners are unable, unwilling or perhaps just rather slow to carry out repairs. Read in conjunction with this report it looks as if those repairs might be relatively minor.

Of course £12,000 per property would only pay for repair, not acquisition costs. But in a vibrant housing market like London’s the priority is to increase the supply of housing. Getting the property into a habitable condition does just that. The market does the rest. When you consider that the Housing Corporation’s London programme this year equates to a subsidy of £91,000 per property to create just over 1,000 new homes, £12,000 begins to look even more of a bargain. There are 33,000 long-term empty homes in London, a figure that has been static for years. At just over a million pounds for a thousand more homes it really does sound too good to miss.

Tuesday, April 18, 2006

Guardian Campaign of the Week

The Empty Homes Agency is this week's Guardian campaign of the week.,,1755688,00.html

Thursday, April 13, 2006

How Green is Your Valley?

One of the joys of the Easter break is that instead of being at work you will be able to sit down and watch children’s television. If you haven’t watched it for a while you might be quite surprised – it’s got much better. Blimey even Bob the Builder has gone green! ….Well sort of.

The latest series sees Bob and his gang abandoning his previous odd jobs and maintenance around Bobsville and building a whole new eco friendly development in neighbouring Sunflower Valley. He’ s got his building gang to start using the catchphrase “reduce reuse recycle”. They’re building straw bale houses, underground houses, using sustainable building materials, solar panels, and wind turbines.

I’m all for educating kids early, but one gripe. Sunflower valley is a greenfield development. May be the population of Bobsville and Bobsland are expanding. If so the new characters have got to live somewhere - overcrowding, homelessness and lack of economic mobility are hardly the sots of things that you want to be showing on children’s television. But Bob was pretty green before -maintaining and extending the useful life of houses, restoring derelict houses, adapting buildings so that they can have new uses. But now he’s become a developer ignoring the potential of existing houses, ignoring brownfield sites and going for the easy and profitable option of tearing up the countryside. Shame on you Bob – go back to the old job!

Wednesday, April 12, 2006

Squashing the Balloon

Labour MP Karen Buck once memorably compared trying to improve housing conditions to sitting on a semi-inflated balloon. Squash down on one issue and another problem pops up somewhere else. So for example – clamp down on poor housing conditions and affordability problems pop up. Increase housing choice for tenants and re-let times go up.

The government has set itself on a course to tackle one of the biggest and hardest of all housing problems - undersupply. There are some clear benefits to doing this; the supply v demand equation is shifted reducing affordability, poorer households may be able to afford better housing, overcrowding could be reduced, and increased choice of housing allows greater mobility of the workforce. All good stuff, but housing supply is a big bit of the balloon to squash down all at once. What problems are going to pop up elsewhere? I don’t know the answer but here are some possibilities.

An increased ratio of homes to population must surely result in a greater number of voids. Given a choice people are likely to want to live in new houses and less popular housing areas will suffer.

Decreasing affordability is another way of saying lower house prices. Great news if you are looking to buy, probably not so popular amongst the owner occupied sector. Expect a middle class backlash at some point.

Poorer owner occupiers in less popular areas could suffer. Tenants would be able to move away, but owner occupiers stuck with a mortgage and an asset too big to abandon would be stuck and unable to move.

Reduced demand and reduced prices are potentially bad news for the private rented sector. New supply is likely to be predominantly for owner occupation and social renting so private renting retreats into the older and possibly less popular housing stock.

This is not to say that tackling undersupply is wrong. But as Karen Buck pointed out there is always a reaction to any big policy decision. It’s as well to be prepared.

Monday, April 10, 2006

Bling v Refurbishment

Kevin McCLoud designer and presenter of Channel 4's Grand Designs became the latest person to openly criticise government's attitude to demolition and new build.

"There is a lot of vanity at work here, the vanity of politicians, architects, developers." he said in yesterday's Independent
"They all want to create things that stand out and say, 'Look at me'. I am making a plea for forgotten buildings. They all have a historic value. If you remove them you are slowly unpicking history. There is a ghastly kind of utopian ideology about it."

"For 50 years, we have been complaining about how the post-war construction boom unnecessarily erased so many good buildings. But we are making similar mistakes now, in the pursuit of bling."

This is an interesting debate. SAVE Britain's Heritage made some very similar points in their recent response to the pathfinders a couple of months ago:

and got a very caustic response from ODPM

But there is a very important point here that government seem to be blind to; buildings stand for more than just their use. It's easy to say that aesthetics, history, and heritage don't matter as much as homelessness, affordability and housing supply. But that's not to say they don't matter at all.

Of course some buildings need demolishing and some need building. But what McCloud is tapping into is a widely held view that government views new buildings as good and old buildings as bad.

Thursday, April 06, 2006

Great Engine But No Spark Plugs

Today sees the introduction of Empty Dwellings Management Orders, well sort of. All of the powers relating to EDMOs in the Housing act have been enabled today except one (section134). Does this little section make any difference? You bet it does. Section 134 gives Residential Property Tribunals the power to issue interim EDMOs. Without it none of the rest of the EDMO powers are useable. It feels a bit like being given a petrol engine with no spark plugs.

So have we been duped? No not really. The spark plugs (Section 134) will be fitted on July 6, bringing all the powers into use. The thinking behind the delay has some merit. EDMOs can only been issued on homes that have been empty for 6 months or more. With the spark plugs fitted a local authority could have turned up at the Residential Property Tribunal this morning and applied for an EDMO on a property that only became empty last October. The property owner could quite reasonably claim that he had no knowledge of the new legislation and it’s all horribly unfair. The next three months give an introductory period so that when Residential Property Tribunals are able to issue orders, the property owners will in theory had at least 3 months exposure to them.

Of course there is always one smart Alec and one maverick idea that I have heard floated is this: With no authorisation for EDMOs possible until July local authorities might go ahead and issue EDMOs themselves. Well try driving a car with no spark plugs in the engine. It won’t work, and neither will this idea. We’ve waited for five years; another three months won’t do any harm.

Wednesday, April 05, 2006

An Olympian Plan

Yesterday Tony Blair eulogised about how London was preparing for the greatest show on earth. No not the May local elections, but the 2012 Olympic Games. He was speaking at the launch of the Government's report 'Building on Success: London's challenge for 2012'
One of the big themes of London’s Olympic bid was its aim to regenerate London. Inevitably a successful city is also a growing one and a large part of the report is devoted to improving infrastructure and housing supply. My reason for talking about it here is that here is a plan that really sets tackling empty homes within a wide-ranging strategy. Ensuring there are enough decent homes for everybody and that the streets are not littered with empty homes, is one small but important component of a city fit to host the “greatest show on earth”. Other regions and cities may not have the games to host but they could learn from this.

Tuesday, April 04, 2006

A Brief History of Empty Dwellings Management Orders

On the eve of the introduction of empty dwelling management orders I am going to indulge myself with a short retrospective of the rather amazing story of how we got to this point.

Back in 2000 I was enjoying a Dutch beer with a Dutch friend and the conversation got onto the issue of empty homes. He explained why there were hardly any empty homes in the Netherlands. “The government banned them,” he said. He then went on to describe what sounded like a brilliant piece of legislation that enabled local authorities to deal with privately owned empty homes.

Over the next few weeks I mulled the idea over and sketched out an idea of how similar legislation might be drawn up for the UK. I called it compulsory leasing. I discussed it with colleagues and housing professionals. To my surprise everybody liked the idea.

In November 2001 I got the opportunity to go public with the idea. What was then called the DTLR select committee on empty homes called various witnesses, amongst them the Local Government Association for whom I was an advisor. The select committee were interested in the concept and in their report published in March 2002 they suggested that a pilot compulsory leasing scheme should be undertaken

The government’s response was warm but guarded. "The government is attracted by the recommendation for a compulsory leasing scheme for long term empty properties where the owner has refused all approaches by the local authority to bring the property back into use voluntarily…. Given that primary legislation would be required, it would not be possible to pilot arrangements on empty homes prior to enactment of any legislation. However, careful consideration would always be given to how the proposal might be rolled out to local authorities, including whether this might be on the basis of pilots in a number of areas.”

Privately government was saying that primary legislation was unlikely. But compulsory leasing had by then become an Empty Homes Agency campaign. We put together a diverse and formidable coalition of partners from RICS, the British Property Federation, through to the Crisis, Homeless Link, Housing Justice, Shelter and the TGWU. Local authority supporters included Hammersmith and Fulham, Harrow, Gateshead, Middlesborough, Salford, Sheffield, South Oxfordshire, and Southampton. All of whom supported the introduction of new legislation.

The Empty Homes Agency raised the issue compulsory leasing with then housing minister Lord Falconer at their meeting in March 2002 and with Lord Rooker at a meeting in September 2002 and Keith Hill in December 2003. The government was at that stage putting together the housing bill that would eventually become the Housing Act 2004. Weighted down with manifesto commitments on the right to buy, sellers packs, licensing of houses on multiple occupation and, technical changes to housing standards, there appeared to be no room for compulsory leasing in the bill, but ministers showed enthusiasm for exploring the idea in the long term. In February 2003 the government launched its Sustainable Communities Plan and within it there was a promise to consult on compulsory leasing

In the summer of 2003 the ODPM launched a consultation paper at the Empty Homes Agency’s joint conference with the Social Market Foundation. on what it called “Empty Homes Management Orders” (Compulsory Leasing wasn’t a very new Labour phrase. The name was to change again later to empty dwellings management order when somebody noticed that the bill already included reference to HMOs and EHOs – EHMOS was surely an acronymic recipe for confusion). The response to the consultation was largely favourable but government appeared to be in no hurry.

In May 2004 Labour backbencher David Kidney MP tabled an amendment to include Empty homes management orders in the bill. See here And in the Parliamentary debate on the housing bill both main opposition parties tabled amendments in support of including empty homes management orders.

On 19th May 2004 the Housing Minister, Keith Hill MP, announced that the Government wanted to introduce their own amendment to include empty homes management orders in the bill. Telegraph opinion here The bill was passed and became the Housing Act 2004 when it received royal assent in November 2005. Secondary legislation which enabled the power come into force on April 6 2006.

Meeting my Dutch friend again recently I realised that the Netherlands hadn’t banned empty homes; surely an impossible legal feat anyway. But neither, in fact, did they have any legislation that is anything like Empty Dwellings Management Orders. Something had obviously got lost in translation or may be it was the Dutch beer. Either way for what started out as getting the wrong end of the stick it turned out to be quite a productive journey.

Monday, April 03, 2006

One Fiscal Crumb for Empty Homes

On the threshold of the new financial year I thought it would be appropriate to give todays post a fiscal theme. As you may have noticed 31 March came and went and as predicted here the government did not use the opportunity presented by the EU window to harmonise VAT on new build and refurbishment. However there was at least a tiny bit of movement on stamp duty, the threshold for 1% stamp duty on property purchases moved up from £120,000 to £125,000. As discussed here on earlier posts a higher threshold gives greater incentive for people to buy derelict properties and refurbish them. This change barely keeps up with house price inflation, but at least it was better than nothing at all.

So a very small chear for the budget. Here are some suggestions to the government for next time for fiscal changes they could make that would help encourage more empty homes into use.

· Create a level playing field and harmonise VAT between new build and refurbishment.
· Review stamp duty and consider exempting purchases of long-term empty properties that are acquired for refurbishment and reoccupation.
· Ring fence the additional revenue generated by removal or reduction of council tax discounts on empty homes and channel it into tackling empty property.
· Remove the exemption from council tax for uninhabitable properties.