Wednesday, October 24, 2007
Why the Government must do something about Britain’s empty properties
My thanks again to Anne Ashworth for another excellent opinion piece in the Times: see here
Thursday, October 18, 2007
Good news but is the government still missing the point on empty homes?
Government announcements on empty homes are like buses you wait ages for one then four turn up at once. So it was with last week’s comprehensive spending review. The chancellor announced four changes, three of which will undoubtedly help return more of England’s 670,000 empty dwellings into homes and one that highlights why the government is still missing the point.
Firstly the good news: anachronistic VAT rules that deem building a new house is zero rated but refurbishing empty homes is charged 17.5% have been amended. Now works to renovate homes empty for two years or more will be charged at 5% VAT (Down from three years). A small tweak perhaps, but it will make it more cost effective to bring about 100,000 empty homes back into use. In a property market governed by profit margins this is bound to have a positive effect.
Secondly the government is to review council tax discounts for empty homes. Currently homes are exempt from council tax for up to twelve months after they become empty. Many then enjoy a 50% discount for as long as they remain unoccupied. Councils can remove the discount but only about half have done so. We calculate that half a million empty homes receive a discount or are exempt from council tax. A public subsidy for keeping homes empty,
Thirdly the government is to include reused empty homes within the new housing and planning delivery grant. Reusing empty homes creates new housing just as well as building new homes but with reduced environmental impact and less land take. In our view rewarding council’s for bringing empty homes back into use will help increase housing supply.
So why is the government still missing the point? For that we need to look at the fourth and less welcome announcement. The government has removed the requirement for local authorities to report the number of empty homes they have returned to use. Their claim that the move reduces the bureaucracy and burdens on local authorities would be more plausible had they not introduced a whole raft of new indicators on building new homes at the same time. It rather begs the question how will the government reward councils for bringing empty homes back into use if it no longer wants to know what they are doing about it? On a wider level it also illustrates their thinking. They have listened and responded to ideas that will help, but on a political level they still don’t appear to accept that getting more homes back into use will increase the numbers of available homes. It’s a shame. The government is introducing measures that really could help but appears blind to their potential.
Firstly the good news: anachronistic VAT rules that deem building a new house is zero rated but refurbishing empty homes is charged 17.5% have been amended. Now works to renovate homes empty for two years or more will be charged at 5% VAT (Down from three years). A small tweak perhaps, but it will make it more cost effective to bring about 100,000 empty homes back into use. In a property market governed by profit margins this is bound to have a positive effect.
Secondly the government is to review council tax discounts for empty homes. Currently homes are exempt from council tax for up to twelve months after they become empty. Many then enjoy a 50% discount for as long as they remain unoccupied. Councils can remove the discount but only about half have done so. We calculate that half a million empty homes receive a discount or are exempt from council tax. A public subsidy for keeping homes empty,
Thirdly the government is to include reused empty homes within the new housing and planning delivery grant. Reusing empty homes creates new housing just as well as building new homes but with reduced environmental impact and less land take. In our view rewarding council’s for bringing empty homes back into use will help increase housing supply.
So why is the government still missing the point? For that we need to look at the fourth and less welcome announcement. The government has removed the requirement for local authorities to report the number of empty homes they have returned to use. Their claim that the move reduces the bureaucracy and burdens on local authorities would be more plausible had they not introduced a whole raft of new indicators on building new homes at the same time. It rather begs the question how will the government reward councils for bringing empty homes back into use if it no longer wants to know what they are doing about it? On a wider level it also illustrates their thinking. They have listened and responded to ideas that will help, but on a political level they still don’t appear to accept that getting more homes back into use will increase the numbers of available homes. It’s a shame. The government is introducing measures that really could help but appears blind to their potential.
Tuesday, September 04, 2007
Conservative calls for extending EDMOs
Last year the Conservatives were calling for the abolition of EDMOs, today a prospective Conservative candidate, Lee Martin, is calling for them to be extended to housing associations. He makes the point that local Sunderland housing association gentoo (no capital letter) has 1253 empty homes.No we don’t say gentoo. Only “640 are gearing up to be demolished to enable gentoo to continue to provide homes for the future". Not sure I understand the logic, but this is not the first time this blog has reported problems of empty homes hanging around waiting to be demolished in Sunderland see this from last year.
Interesting idea on the EDMOs though. What bothers me is how this could actually work. The local authority would take over management of the property. The problem is they got rid of their property management function when they transferred their housing stock. The logical solution is that they could get the new stock transfer housing association to do it on their behalf. Who are they? gentoo.
Gentoo in case you were wondering is the new name for Sunderland Housing Group. Of all the strange names rebranded housing associations have given themselves this must be the worst. According to this the word comes either from a derogatory term for Hindus or a species of penguin.
Thursday, August 23, 2007
As Bad as Basra
The photo on the right of this column is of a pair of semis in Prescott Drive in Liverpool. It is one of three pairs of semis in a row all empty and in a similar state of neglect. They are the result of what, in my view, is one of the most depressing empty homes stories in the country. I’ve covered it before in this blog, see here and here. Louise Baldock is the local councillor and has published this update on her blog this morning. It does not fill me with hope. What would we be saying if these properties were privately owned? Compulsorily purchase them, take out an EDMO, I suspect. But these houses are already owned by the council and have been for at least seven years. It does nothing to further the cause of local authorities being the agents of managing housing markets. In fact in this case it says to me they are making a pig’s breakfast out of it. Talking about the empty homes Louise says “my residents are living in the sort of circumstances that be familiar in Basra.”
Friday, August 17, 2007
Good Local Story
This makes a good story for a local paper. The Lincolnshire Echo has obtained details of all the empty homes in Lincoln making use of the Freedom of Information Act. Using approximate valuations from their council tax banding they worked out that £13.5 million worth of property is standing empty in the city. Better than that the paper also prints the roads where the properties can be found.
Tuesday, August 07, 2007
Buy to Leave a Myth – Oh Really!
Instant Access Properties has described “Buy to Leave” as a red herring on the basis of a survey of about 500 of their members. See report here.
Who, you might wonder are Instant Access Properties and why do they care? Well on their website they describe themselves as “the largest UK organisation dedicated to the creation of wealth through residential property investment.”
Fair enough I suppose. It’s a free market.
They go on to explain: “we specialise in off-plan property. We challenge the traditional convention that property investment involves buying a finished building. We believe that the smarter thing is to buy one that’s not yet built.”
You get the general idea? It goes on:
“Buying off-plan is a unique way of getting the most out of property investment. Off-plan property is sold to investors before any actual structure exists, meaning that investors gain from the capital growth of the property during its development phase.”
In case you were still in any doubt about what this service is all for, it goes on to explain the concept of “ instant creation of wealth “. And that is the concept that is being sold here. Buy before the property is built, and provided the market continues to grow you will make a tidy sum out of the capital appreciation before it is even ready to live in. It’s a neat trick, and of course, if you are really clever you can sell before completion and avoid conveyancing fees, and stamp duty. If you are not so clever or a bit unlucky you end up saddled with a completed property that you didn’t really want, and can’t afford to sell or let without making a thumping loss; a prime candidate for a future empty home.
You can see why Instant Access Properties are so anxious to dispel the idea of “buy to leave” but I get the impression that the questions in the survey may have been carefully chosen. Of course only a minority will deliberately leave their properties empty for capital gain. Frankly I am surprised it’s as many as 3%. But many more will have ended up in the same position inadvertently.
The real problem is that the dominance of the buy off-plan industry is skewing the way properties are built and sold. London Development Research reported earlier this year that 70% of residential properties sold in London were sold to buy-to let investors. Much of the new build in off-plan sales.
In the past developers selling principally to owner occupiers had to build what the future occupier wanted otherwise they couldn’t sell them. Now developers aren’t building for occupiers but to a market of remote speculators interested primarily in “instant creation of wealth”. Inevitably developers cut costs and the properties that are built are less attractive to occupiers. The idea that we are building the slums of tomorrow may be a bit far fetched. But I can foresee long term problems with the homes that have been created to serve this industry.
Who, you might wonder are Instant Access Properties and why do they care? Well on their website they describe themselves as “the largest UK organisation dedicated to the creation of wealth through residential property investment.”
Fair enough I suppose. It’s a free market.
They go on to explain: “we specialise in off-plan property. We challenge the traditional convention that property investment involves buying a finished building. We believe that the smarter thing is to buy one that’s not yet built.”
You get the general idea? It goes on:
“Buying off-plan is a unique way of getting the most out of property investment. Off-plan property is sold to investors before any actual structure exists, meaning that investors gain from the capital growth of the property during its development phase.”
In case you were still in any doubt about what this service is all for, it goes on to explain the concept of “ instant creation of wealth “. And that is the concept that is being sold here. Buy before the property is built, and provided the market continues to grow you will make a tidy sum out of the capital appreciation before it is even ready to live in. It’s a neat trick, and of course, if you are really clever you can sell before completion and avoid conveyancing fees, and stamp duty. If you are not so clever or a bit unlucky you end up saddled with a completed property that you didn’t really want, and can’t afford to sell or let without making a thumping loss; a prime candidate for a future empty home.
You can see why Instant Access Properties are so anxious to dispel the idea of “buy to leave” but I get the impression that the questions in the survey may have been carefully chosen. Of course only a minority will deliberately leave their properties empty for capital gain. Frankly I am surprised it’s as many as 3%. But many more will have ended up in the same position inadvertently.
The real problem is that the dominance of the buy off-plan industry is skewing the way properties are built and sold. London Development Research reported earlier this year that 70% of residential properties sold in London were sold to buy-to let investors. Much of the new build in off-plan sales.
In the past developers selling principally to owner occupiers had to build what the future occupier wanted otherwise they couldn’t sell them. Now developers aren’t building for occupiers but to a market of remote speculators interested primarily in “instant creation of wealth”. Inevitably developers cut costs and the properties that are built are less attractive to occupiers. The idea that we are building the slums of tomorrow may be a bit far fetched. But I can foresee long term problems with the homes that have been created to serve this industry.
Tuesday, July 31, 2007
Britain’s Bad Housing
If you missed it you can see it here Britain’s Bad Housing on Channel 4’s Dispatches programme last night painted a rather squalid picture of the state of the country’s housing market. Andrew Gilligan. Yes him! presented a picture of a market that was scrabbling around to wring the last few drops of profit out of the housing boom before it petered out.
“Buy-to-Leave” has become a metaphor for all that it is bad about the housing market at the moment. Greedy speculators apparently buying properties and leaving them empty to sell at a moment of their choosing. It has always seemed a little exaggerated to me. Surely a really greedy speculator would want the rental income as well?
Gilligan laid the blame not on the speculators but the builders. In Salford Quays a notorious “buy to leave” blackspot , flats were empty because too many high value flats had been built. The builders’ intention was to sell to the speculator market not to consider the housing needs of the area. Consequently the new flats were too small and too expensive for Salford’s population. Naive speculators who hadn’t researched the local rental market or had hoped to sell them on quickly found that they had been sold a pup. This sounds a more plausible explanation than deliberately leaving them empty. Whatever the reasons there can be little doubt that Gilligan is right, properties are being left empty because they are being built as tradable commodities and not liveable homes. No doubt many “buy-to –leave” landlords are sitting tight waiting for an upturn in the market to give them a painless way out. Unfortunately for them all the signs are the market is about to head in the opposite direction.
“Buy-to-Leave” has become a metaphor for all that it is bad about the housing market at the moment. Greedy speculators apparently buying properties and leaving them empty to sell at a moment of their choosing. It has always seemed a little exaggerated to me. Surely a really greedy speculator would want the rental income as well?
Gilligan laid the blame not on the speculators but the builders. In Salford Quays a notorious “buy to leave” blackspot , flats were empty because too many high value flats had been built. The builders’ intention was to sell to the speculator market not to consider the housing needs of the area. Consequently the new flats were too small and too expensive for Salford’s population. Naive speculators who hadn’t researched the local rental market or had hoped to sell them on quickly found that they had been sold a pup. This sounds a more plausible explanation than deliberately leaving them empty. Whatever the reasons there can be little doubt that Gilligan is right, properties are being left empty because they are being built as tradable commodities and not liveable homes. No doubt many “buy-to –leave” landlords are sitting tight waiting for an upturn in the market to give them a painless way out. Unfortunately for them all the signs are the market is about to head in the opposite direction.
Monday, July 23, 2007
Housing Green Paper - New Homes From Empty Property
Yvette Cooper launched the Housing Green Paper a couple of hours ago and I'm pleased to report that the empty homes issue is well covered. In fact chapter 4 is devoted to it almost entirely. There’s some good stuff in here, but some important omissions too.
Firstly the good stuff; Government is acknowledging the problem. The occupation rates of housing are important as the numbers of homes. Building lots of new homes won’t solve housing undersupply problems if large proportions of them are left empty. The government makes some proposals here about resolving it. It centres around enabling local authorities to use EDMOs more effectively The heavy hint here is that government looks like it might be rethinking the housing planning and delivery grant mechanism to include a financial reward for local authorities to get empty homes back into use. The government consulted on revising the housing planning and delivery grant last year. It proposed to offer grants to local authorities for approving planning applications to build more homes. At the moment local authorities are rewarded only for their efficiency of processing planning applications not the wisdom of their decisions. You might argue that giving a financial reward for judging an application in one way and not the other rather takes away local authority’s planning impartiality, but we’ll leave that argument for others to make for now. My real problem was that the government’s proposals would have rewarded local authorities for allowing new homes to be built, but would offer no reward for work they did to get empty homes back into use. Skewing thinking and action towards new build as the only way of creating new homes. Thankfully sense seems to be prevailing and unless I’m reading too much into it, there is a suggestion that we could get a mechanism that rewards all ways of creating new housing supply and thereby providing some much needed funding to help local authorities to get on with the job of turning empty property into new homes.
There are however omissions. To give the government credit this document was put together in record time with very little warning from our new PM that he wanted it. But omissions there are; whatever view you take about the effectiveness of local authorities, I don’t think anybody believes that they are capable of sorting the empty homes problem out single-handed. Empty homes are a housing market failure and any real solution must include incentives to make the housing market work more effectively. Here are two suggestions I would like to see:
Take away the incentive for speculators to buy to leave by abolishing the council tax discount for empty homes and giving local authorities the flexibility to double the council tax on long-term empty homes.
Harmonise the VAT on refurbishing empty homes and building new homes. Making it more affordable and cost effective to renovate derelict homes. Currently new homes are zero rated for VAT, refurbishing most empty homes is rated at 17.5% VAT.
These ideas will certainly be the Empty Homes Agency’s response. But we’ve now got the summer to have a proper debate about what we need.
Firstly the good stuff; Government is acknowledging the problem. The occupation rates of housing are important as the numbers of homes. Building lots of new homes won’t solve housing undersupply problems if large proportions of them are left empty. The government makes some proposals here about resolving it. It centres around enabling local authorities to use EDMOs more effectively The heavy hint here is that government looks like it might be rethinking the housing planning and delivery grant mechanism to include a financial reward for local authorities to get empty homes back into use. The government consulted on revising the housing planning and delivery grant last year. It proposed to offer grants to local authorities for approving planning applications to build more homes. At the moment local authorities are rewarded only for their efficiency of processing planning applications not the wisdom of their decisions. You might argue that giving a financial reward for judging an application in one way and not the other rather takes away local authority’s planning impartiality, but we’ll leave that argument for others to make for now. My real problem was that the government’s proposals would have rewarded local authorities for allowing new homes to be built, but would offer no reward for work they did to get empty homes back into use. Skewing thinking and action towards new build as the only way of creating new homes. Thankfully sense seems to be prevailing and unless I’m reading too much into it, there is a suggestion that we could get a mechanism that rewards all ways of creating new housing supply and thereby providing some much needed funding to help local authorities to get on with the job of turning empty property into new homes.
There are however omissions. To give the government credit this document was put together in record time with very little warning from our new PM that he wanted it. But omissions there are; whatever view you take about the effectiveness of local authorities, I don’t think anybody believes that they are capable of sorting the empty homes problem out single-handed. Empty homes are a housing market failure and any real solution must include incentives to make the housing market work more effectively. Here are two suggestions I would like to see:
Take away the incentive for speculators to buy to leave by abolishing the council tax discount for empty homes and giving local authorities the flexibility to double the council tax on long-term empty homes.
Harmonise the VAT on refurbishing empty homes and building new homes. Making it more affordable and cost effective to renovate derelict homes. Currently new homes are zero rated for VAT, refurbishing most empty homes is rated at 17.5% VAT.
These ideas will certainly be the Empty Homes Agency’s response. But we’ve now got the summer to have a proper debate about what we need.
Monday, July 16, 2007
Emerging Consensus Over Empty Homes
Over the weekend two more correspondents Charles Clover in The Telegraph and Anne Ashworth in the Times added their voices to calls for the government to address empty homes as part of the push for 3 million new homes.
Friday, July 13, 2007
Telegraph Speaks out on Empty Homes
My thanks to Anne Cuthbertson at the Telegraph for this excellent item. The Telegraph is an intelligent paper, but on the basis of these comments it does seem to attract some odd readers.
Size Doesn't Matter
A sad but irritating story in the Liverpool Daily Post this morning. Am I just humourless or are the continuous little digs at Hazel Blears size annoying? We should surely judge ministers on their achievements. Gordon Brown has just given the new Communities secretary a huge task; to solve the housing crisis. if she achieves it she will be a political star. Many have tried before and failed but with the priority given to housing by the new Prime Minister we should be under no illusion that this time they intend to succeed. One item I would like to add to her in-tray is empty homes. Surely England’s 300,000 long term empty homes should be a priority source of some of the 3 million new homes the government rightly says we need.
The Empty Homes Agency is today calling for the government to
Take away the incentive for speculators to buy to leave by abolishing the council tax discount for empty homes and giving local authorities the flexibility to double the council tax on long-term empty homes.
Harmonise the VAT on refurbishing empty homes and building new homes. Making it more affordable and cost effective to renovate derelict homes. Currently new homes are zero rated for VAT, refurbishing most empty homes is rated at 17.5% VAT.
The Empty Homes Agency is today calling for the government to
Take away the incentive for speculators to buy to leave by abolishing the council tax discount for empty homes and giving local authorities the flexibility to double the council tax on long-term empty homes.
Harmonise the VAT on refurbishing empty homes and building new homes. Making it more affordable and cost effective to renovate derelict homes. Currently new homes are zero rated for VAT, refurbishing most empty homes is rated at 17.5% VAT.
Wednesday, July 04, 2007
Happy Birthday EDMOs
It was a year ago today that local authorities gained the power to use Empty Dwelling Management Orders. The Daily Express claimed that there would be a national purge on empty homes with thousands seized under the new powers. It claimed that the government had built up a war chest that would fund the programme. This, the Express claimed was the single worst act by a British government, TV presenter Kevin McLeod said that with the new powers the UK had effectively become a communist state. The Daily Mail claimed that it was a sinister plot to snatch homes off the dead. All I'm afraid to say a bit over-dramatic. There have been three interim EDMOs made, and no final EDMOs. No properties have been seized. And I don't know what you think but it doesn't feel much like a communist state to me.
On the other hand many empty home owners have heard about the new powers and a good number have decided that perhaps they had better do something with their property before the council gets their hands on it. Depending on your view that may or may not be a good thing, but it's far cry from the hysterical vision that much of the tabloid press painted a year ago today.
On the other hand many empty home owners have heard about the new powers and a good number have decided that perhaps they had better do something with their property before the council gets their hands on it. Depending on your view that may or may not be a good thing, but it's far cry from the hysterical vision that much of the tabloid press painted a year ago today.
Tuesday, July 03, 2007
Unsuitable for Children
Apparently this blog is unsuitable for children. This http://mingle2.com/blog-rating has given "unlocking the potential" a PG certificate. The reason given is the frequency of the words "death" "pain", "murder" and "sexy" I can't remember writing any of those especially sexy! What a risque subject empty homes has turned out to be.
Tuesday, June 12, 2007
Flying a Kite
Ok guys I get the message. Local authorities don’t want to give out lists of empty homes to developers. As far as I understand it your arguments are
- It’s going to create more work for you
- You’re going to get the blame if the property gets squatted
Well Okay both are possible, but in all of this debate nobody has challenged my view that giving out the information is likely to result in more empty homes coming back into use.
So how about this as a suggestion? You provide information on homes you know to be long-term empty to the Empty Homes Agency and we disclose it to developers, potential homeowners or anybody else who asks for it. That way if anybody asks you for a list you can refer them to us, and if there’s any blame to be had we’ll take it. Oh and as an aside we are not a public body so we are not subject to the Freedom of Information act.
Tuesday, May 15, 2007
Freedom of Information on Empty Homes - A Decision
A decision by the information tribunal released today means that local authorities must now disclose information on certain empty homes. The decision in the case of Colin England, Bexley Council, and the Information Commissioner orders Bexley council to disclose addresses and ownership details of all long term empty homes that are not owned by individuals. An individual is defined as a natural person or beneficiary of a deceased person. They are not required to disclose details (addresses or ownership details) of properties owned by individuals.
My understanding is that this means that addresses and ownership information on properties empty for more than 6 months owned by local authorities, public bodies, housing associations, organisations and private companies should now be disclosed to those who request it.
A bit of a fudge, but an improvement on the previous position where most local authorities refused to disclose information on any empty homes. Pity the poor souls in council tax departments who have to sift out the individuals from the non-individuals.
My understanding is that this means that addresses and ownership information on properties empty for more than 6 months owned by local authorities, public bodies, housing associations, organisations and private companies should now be disclosed to those who request it.
A bit of a fudge, but an improvement on the previous position where most local authorities refused to disclose information on any empty homes. Pity the poor souls in council tax departments who have to sift out the individuals from the non-individuals.
Friday, March 30, 2007
101,000 Empty Homes In Scotland - or may be 76,000
The General Registry Office for Scotland released it's "Household Estimates for Scotland" report yesterday apparently showing 101,000 empty homes in Scotland, 4.2% of the total housing stock. In fact the data also includes second homes and holiday homes which they were not able to disaggregate. Comparable data for England and Wales is disaggregated and shows 3.2% of the housing stock is empty and 0.7% is used as holiday homes and second homes, a total of 3.9% . If the same same proportions existed in Scotland it would mean that there are 76,000 empty homes.
Monday, March 26, 2007
Save BVPI 64
For those looking for a cheerful start to the week The TV series “The Trap: What Happened to our Dreams Of Freedom” (BBC2 Sundays in March) was not it. It did however contain a fascinating insight into the target culture that has pervaded over the last 10 years. Introduced by the government with the intention of freeing up public services from diktat, targets and performance indicators, the programme explained, ended up doing the exact opposite. The problem was, human nature being what it is public servants devised ways of meeting the target without actually achieving the outcome the government wanted. So for example; faced with targets for reducing patients on trolleys, hospitals unscrewed the wheels and called them beds. Government responded by providing guidance, more detailed targets and then measuring performance with more and more detailed performance indicators. A new layer of bureaucracy was born.
What the programme didn’t say is that government is beginning to acknowledge that target and performance indicator culture has gone too far. It has commissioned the “Lifting the Burdens Task Force “ to look into the work placed on local authorities by these targets and indicators. It’s first report published a couple of weeks ago looks at housing and planning and has made recommendations that a large number of indicators and targets are scrapped. BVPI 64 amongst them.
BVPI 64 is the government’s national indicator for empty homes brought back into use by local authorties. And yes some local authorities have devised way of clocking up high returns without really achieving the outcome the government wanted. As some of you may have read Inside Housing reported on this in February. The trick has been to count properties brought into council leasing schemes as brought back into use. Not all of them will have been empty in the sense the government understood, but of course all will have been unoccupied for a few days or perhaps even just overnight as the property changed hands. Crafty eh! Not quite as cynical as unscrewing hospital trolley wheels perhaps, but devious none the less.
In response to tricky reporting, the government introduced two new performance indicators under the CPA (Comprehensive Performance Assessment) regime to provide more information on the number of empty homes that are actually empty in each council area. Local authorities quite reasonably complained that it was all getting too much and collating the figures took so long they had no time left to actually deal with the empty homes. Lifting the Burdens Task Force has recommended scrapping one of the CPA indicators too.
Is this good news? Well partly yes, reducing the number of performance indicators is in principle a good idea. But we think the task force has picked the wrong ones to scrap when it comes to empty homes. BVPI 64 is far from perfect and yes it’s open to creative reporting but most local authorities are honest and it still gives a good indication of performance. Every year since its introduction the total number of empty homes in England has dropped. Whilst clearly there are other factors at work, we believe the performance indicator has made a significant contribution to this reduction.
Many local authority empty property officers have reported to us that the only reason they are in post is because there is a national performance indicator measuring what they do. Others have said that the funding for their work is only made available to ensure good performance against BV64. Of course it’s much better if local authorities tackle empty homes because they know it’s important for their community. A number do this very effectively. But others don’t and take their lead from what they are measured on. There is a real danger that scrapping BV64 will be seen as a signal that government is no longer concerned whether local authorities perform in this area, and many will stop. Of course we will never know, because there will be no means of finding out what the local authorities have done.
What the programme didn’t say is that government is beginning to acknowledge that target and performance indicator culture has gone too far. It has commissioned the “Lifting the Burdens Task Force “ to look into the work placed on local authorities by these targets and indicators. It’s first report published a couple of weeks ago looks at housing and planning and has made recommendations that a large number of indicators and targets are scrapped. BVPI 64 amongst them.
BVPI 64 is the government’s national indicator for empty homes brought back into use by local authorties. And yes some local authorities have devised way of clocking up high returns without really achieving the outcome the government wanted. As some of you may have read Inside Housing reported on this in February. The trick has been to count properties brought into council leasing schemes as brought back into use. Not all of them will have been empty in the sense the government understood, but of course all will have been unoccupied for a few days or perhaps even just overnight as the property changed hands. Crafty eh! Not quite as cynical as unscrewing hospital trolley wheels perhaps, but devious none the less.
In response to tricky reporting, the government introduced two new performance indicators under the CPA (Comprehensive Performance Assessment) regime to provide more information on the number of empty homes that are actually empty in each council area. Local authorities quite reasonably complained that it was all getting too much and collating the figures took so long they had no time left to actually deal with the empty homes. Lifting the Burdens Task Force has recommended scrapping one of the CPA indicators too.
Is this good news? Well partly yes, reducing the number of performance indicators is in principle a good idea. But we think the task force has picked the wrong ones to scrap when it comes to empty homes. BVPI 64 is far from perfect and yes it’s open to creative reporting but most local authorities are honest and it still gives a good indication of performance. Every year since its introduction the total number of empty homes in England has dropped. Whilst clearly there are other factors at work, we believe the performance indicator has made a significant contribution to this reduction.
Many local authority empty property officers have reported to us that the only reason they are in post is because there is a national performance indicator measuring what they do. Others have said that the funding for their work is only made available to ensure good performance against BV64. Of course it’s much better if local authorities tackle empty homes because they know it’s important for their community. A number do this very effectively. But others don’t and take their lead from what they are measured on. There is a real danger that scrapping BV64 will be seen as a signal that government is no longer concerned whether local authorities perform in this area, and many will stop. Of course we will never know, because there will be no means of finding out what the local authorities have done.
Monday, March 12, 2007
Touching Altruism From Greenbelt Landowners
The Guardian reports today that 10,000 acres of greenbelt land are under threat from some of the most unfashionable companies and institutions in the country: The Crown, BP, Oxford university colleges, British Aerospace, and private land speculators. All it seems are ready to cash in their countryside land on the massive potential increase in land value that may be realised if ideas in the forthcoming planning white paper become law.
If you believe the article Hertfordshire will practically cease to exist and instead become a suburb. The article says that 92,000 new homes may be built in the county.
All quite possibly true, and it’s fair to assume that altruistic concerns about housing need are not the main drivers here. What baffles me about this issue is how some consider greenbelt land a first and not a last resort when it comes to meeting housing need.
There are well over 300, 000 long term empty homes in public and private ownership. Some of these will and all should be reused to provide new housing supply. But the government does not take their potential into account when calculating the need for new homes. It seems to me as if the government has a blind spot on this issue it can only see new housing supply in terms of new houses; the big house builders are of course only too happy to concur. But if you stop to think there are huge benefits from creating as much new supply from existing buildings as possible. Most empty homes are in existing neighborhoods meaning big savings in infrastructure costs (About £35,000 per property according to an estimate last year) and reusing building structures saves huge quantities of embodied energy (and hence carbon emissions) over new build. That's all to say nothing of the improvements to those existing neighborhoods by improving run down vacant buildings.
Of course this can only be a small contribution to the huge need for new housing. Most will need to be met by building new houses and some I fear will have to be on the green belt. But there are for example 4000 empty homes in Hertfordshire that could be used to meet housing supply needs. Surely, with apologies to the accountants at Crown estates, BP et al we should be looking at these first and the greenbelt last.
If you believe the article Hertfordshire will practically cease to exist and instead become a suburb. The article says that 92,000 new homes may be built in the county.
All quite possibly true, and it’s fair to assume that altruistic concerns about housing need are not the main drivers here. What baffles me about this issue is how some consider greenbelt land a first and not a last resort when it comes to meeting housing need.
There are well over 300, 000 long term empty homes in public and private ownership. Some of these will and all should be reused to provide new housing supply. But the government does not take their potential into account when calculating the need for new homes. It seems to me as if the government has a blind spot on this issue it can only see new housing supply in terms of new houses; the big house builders are of course only too happy to concur. But if you stop to think there are huge benefits from creating as much new supply from existing buildings as possible. Most empty homes are in existing neighborhoods meaning big savings in infrastructure costs (About £35,000 per property according to an estimate last year) and reusing building structures saves huge quantities of embodied energy (and hence carbon emissions) over new build. That's all to say nothing of the improvements to those existing neighborhoods by improving run down vacant buildings.
Of course this can only be a small contribution to the huge need for new housing. Most will need to be met by building new houses and some I fear will have to be on the green belt. But there are for example 4000 empty homes in Hertfordshire that could be used to meet housing supply needs. Surely, with apologies to the accountants at Crown estates, BP et al we should be looking at these first and the greenbelt last.
Tuesday, March 06, 2007
Pathfinders - Plenty of pain, let's wait and see about the gain
A new and highly analytical report National Evaluation - Baseline Report prepared for the government by consultants Ecotec gives us the best information yet on the impact of the 9 housing market renewal pathfinders. The Pathfinder programme started in 2003 and was envisaged to last for 10 to 15 years with the aim of transforming the housing market in 9 of the most depressed areas in the country.
You have to hand it Ecotec this really is a fantastic report it provides a huge amount of data and carefully analyses it against national trends. Everybody knows that the housing market in the country as a whole has changed in the last three years, the question is have the markets in the pathfinders been catching up, keeping up of falling behind ? The original target set by the government was that they should close the gap by one third by 2010.
Two of the most important indicators are house prices and vacancy rates.
House prices have most certainly risen and in most cases above the regional average area. This is evidence that the market is catching up, but as the report acknowledges the reality of this change is that house prices are becoming unaffordable for residents who are generally on low incomes. How much of the increase in prices is down to speculators buying up properties in the expectation of price rises? The report doesn’t say.
Vacancy rates are the indicator which as you might expect interest me the most. The government’s press release claims that vacancy rates have dropped. This is not a lie, but it’s pushing the boundaries of the truth a bit. The overall percentage of empty homes in pathfinder areas has indeed gone down but not by as much as in non-pathfinder areas. But of course this only tells part of the story, the real indicator of the problem is long-term empty homes. They’ve gone up in every one of the pathfinder areas except South Yorkshire. This is the table from the report on long-term empty homes.
You have to hand it Ecotec this really is a fantastic report it provides a huge amount of data and carefully analyses it against national trends. Everybody knows that the housing market in the country as a whole has changed in the last three years, the question is have the markets in the pathfinders been catching up, keeping up of falling behind ? The original target set by the government was that they should close the gap by one third by 2010.
Two of the most important indicators are house prices and vacancy rates.
House prices have most certainly risen and in most cases above the regional average area. This is evidence that the market is catching up, but as the report acknowledges the reality of this change is that house prices are becoming unaffordable for residents who are generally on low incomes. How much of the increase in prices is down to speculators buying up properties in the expectation of price rises? The report doesn’t say.
Vacancy rates are the indicator which as you might expect interest me the most. The government’s press release claims that vacancy rates have dropped. This is not a lie, but it’s pushing the boundaries of the truth a bit. The overall percentage of empty homes in pathfinder areas has indeed gone down but not by as much as in non-pathfinder areas. But of course this only tells part of the story, the real indicator of the problem is long-term empty homes. They’ve gone up in every one of the pathfinder areas except South Yorkshire. This is the table from the report on long-term empty homes.
To give the pathfinders the benefit of the doubt these high vacancy rates may be an inevitable stage of renewing the housing market. It is certainly true that councils and pathfinders have been buying up homes either for demolition or refurbishment. Many of them are standing vacant waiting for something to happen. It may be a case of no gain without pain but at the moment we’ve got the pain we’ll have to wait and see whether there is any gain.
Tuesday, February 06, 2007
The Daily Express has got it's sums wrong
The Daily Express has returned to its theme of bashing EDMOs this week. In one of its better articles it reported the first EDMO in Oxfordshire yesterday under the heading. “Alarm over council seizing Britain’s first empty home”. Amongst the coverage. It trotted out again two glaring errors which it has made before:
There is no appeal against an EDMO and there are 400,000 empty council houses.
The truth is there is an appeal. In fact there are lots of appeal provisions. To say otherwise is simply wrong. I’ve pointed this out to the Express before, but they have either made an error or perhaps the facts don’t suit their argument.
The figure of 400,000 empty council houses is interesting. The true figure is 43,000. Still too many incidentally, but a long way from 400,000. I think I know where they’ve gone wrong. According to last years figures there were a total of 680,000 empty homes in England. Of these 280,000 were long term privately owned empty homes. I think the Express has taken one figure away from the other and assumed the resulting figure must be the number of empty council houses. Wrong. In fact it is mainly made up of private homes empty for less then 6 months. It’s a forgivable error, but it serves to mislead giving the impression that the problem is really one of council empty homes which are being ignored whereas legislation is introduced to tackle the (in their view) smaller problem of privately owned empty homes- giving legitimacy to their argument that EDMOs are unfair.
The point is there is already legislation to deal with empty council (and other publicly owned) homes –PRODs. EDMO balance up the whole picture ensuring there is legislation available to deal with all empty homes where the owner won’t deal with them themselves.
I’ve offered to write a comment piece for the Express to make these points, but as yet I haven’t had a decision. I also sent in a letter for their letters page yesterday, but I see that they have decided to print a letter on the subject from a Mr Cartwright of Essex instead. Mr Cartwright claims the EDMO in Oxfordshire is evidence that we live in police state. If my only information about EDMOs came from the Daily Express I might well conclude the same.
There is no appeal against an EDMO and there are 400,000 empty council houses.
The truth is there is an appeal. In fact there are lots of appeal provisions. To say otherwise is simply wrong. I’ve pointed this out to the Express before, but they have either made an error or perhaps the facts don’t suit their argument.
The figure of 400,000 empty council houses is interesting. The true figure is 43,000. Still too many incidentally, but a long way from 400,000. I think I know where they’ve gone wrong. According to last years figures there were a total of 680,000 empty homes in England. Of these 280,000 were long term privately owned empty homes. I think the Express has taken one figure away from the other and assumed the resulting figure must be the number of empty council houses. Wrong. In fact it is mainly made up of private homes empty for less then 6 months. It’s a forgivable error, but it serves to mislead giving the impression that the problem is really one of council empty homes which are being ignored whereas legislation is introduced to tackle the (in their view) smaller problem of privately owned empty homes- giving legitimacy to their argument that EDMOs are unfair.
The point is there is already legislation to deal with empty council (and other publicly owned) homes –PRODs. EDMO balance up the whole picture ensuring there is legislation available to deal with all empty homes where the owner won’t deal with them themselves.
I’ve offered to write a comment piece for the Express to make these points, but as yet I haven’t had a decision. I also sent in a letter for their letters page yesterday, but I see that they have decided to print a letter on the subject from a Mr Cartwright of Essex instead. Mr Cartwright claims the EDMO in Oxfordshire is evidence that we live in police state. If my only information about EDMOs came from the Daily Express I might well conclude the same.
Friday, February 02, 2007
Another first - A blogger who likes EDMOs
My thanks to Craig Knott, who is, I think, the first blogger (apart from me) ever to write in favour of EDMOs. OK it was last year and his readers don’t seem to agree with him. But I’ll take allies wherever I find them.
Thursday, February 01, 2007
Forget Buy To Let - Now it's Buy To Sit
Those of you who read “Inside Housing” will no doubt be following the developing story of newly built but empty flats in many of the city centres in this country. The story is that many of the new developments that have sprung up in our city and town centres are being left empty by developers who are more interested in the capital value than any potential rental income. The London Evening Standard this week gave a name to the phenomenon – Buy to Sit.
Leeds was highlighted as a particular case in point by Inside Housing. Apparently 50% of new flats there were empty. Salford was not much better with 40% empty. Anybody who has visited Leeds in recent years cannot fail to have noticed the rapidly changing skyline as new apartment blocks spring up like mushrooms in an Autumn field. The centres of Manchester, Liverpool, and Birmingham as well as the river frontage in London are experiencing much the same. What ever you might think of them (and some of the architecture in my view is pretty unimaginative) there is no doubt that these new developments are increasing housing supply. What’s more it’s an increase in the high-density small household housing that we are told the country desperately needs.
It’s this point that makes this story so interesting and potentially worrying. If the housing that is being built is half empty it’s only meeting housing needs by half the amount that planners and housing strategists had anticipated. At this rate the country will need twice the projected growth in housing. It’s a potentially huge issue and I’m grateful to Inside Housing for raising it. At this point however I remain still to be convinced of the scale of the problem. I have no doubt it’s happening, but all of the evidence I have seen is anecdotal and we have yet to see a survey that really answers the question of how big a problem this is.
Whatever the extent there can be no doubt that we are seeing a new type of empty housing. We are used to the idea of old shabby houses being empty. They’re easy to spot and because their vacancy is usually as a result of neglect or failure it’s usually pretty easy to work out what the solution should be. Giving local authorities the job of helping with repairs, letting and leasing options all seems pretty sensible. Most people will accept the notion that local authorities should take enforcement action where all else fails to deal with a long-term empty run down house. But how does a local authority approach pristine vacant flats in modern blocks deliberately left empty by their owners. They’re not shabby, they’re not affecting neighbours, and there is no failure or neglect on behalf of the owner. It’s deliberate. Most of the existing tools local authorities use to bring empty homes back into use are likely to be ineffective or politically difficult in these circumstances. So what do we do? Should local authorities be involved at all? I’m afraid I don’t have the answers at the moment, but we may be on the threshold of a new type of empty homes issue that needs new thinking and new approaches. I'm open to your ideas.
Leeds was highlighted as a particular case in point by Inside Housing. Apparently 50% of new flats there were empty. Salford was not much better with 40% empty. Anybody who has visited Leeds in recent years cannot fail to have noticed the rapidly changing skyline as new apartment blocks spring up like mushrooms in an Autumn field. The centres of Manchester, Liverpool, and Birmingham as well as the river frontage in London are experiencing much the same. What ever you might think of them (and some of the architecture in my view is pretty unimaginative) there is no doubt that these new developments are increasing housing supply. What’s more it’s an increase in the high-density small household housing that we are told the country desperately needs.
It’s this point that makes this story so interesting and potentially worrying. If the housing that is being built is half empty it’s only meeting housing needs by half the amount that planners and housing strategists had anticipated. At this rate the country will need twice the projected growth in housing. It’s a potentially huge issue and I’m grateful to Inside Housing for raising it. At this point however I remain still to be convinced of the scale of the problem. I have no doubt it’s happening, but all of the evidence I have seen is anecdotal and we have yet to see a survey that really answers the question of how big a problem this is.
Whatever the extent there can be no doubt that we are seeing a new type of empty housing. We are used to the idea of old shabby houses being empty. They’re easy to spot and because their vacancy is usually as a result of neglect or failure it’s usually pretty easy to work out what the solution should be. Giving local authorities the job of helping with repairs, letting and leasing options all seems pretty sensible. Most people will accept the notion that local authorities should take enforcement action where all else fails to deal with a long-term empty run down house. But how does a local authority approach pristine vacant flats in modern blocks deliberately left empty by their owners. They’re not shabby, they’re not affecting neighbours, and there is no failure or neglect on behalf of the owner. It’s deliberate. Most of the existing tools local authorities use to bring empty homes back into use are likely to be ineffective or politically difficult in these circumstances. So what do we do? Should local authorities be involved at all? I’m afraid I don’t have the answers at the moment, but we may be on the threshold of a new type of empty homes issue that needs new thinking and new approaches. I'm open to your ideas.
The First Ever Empty Dwelling Management Order
This week sees the confirmation of the first ever Empty Dwelling Management Order The order confirmed by the Residential Property Tribunal will allow South Oxfordshire District Council to take over management control of a two-bedroom house in the village of Berinsfield that has been empty for more than 10 years. Coming more than 6 months since the introduction of the legislation the scenario of a “mass house grab” by local authorities predicated by the Daily Express amongst others has, it appears, not materialised. If anything this case seems to be evidence that local authorities are taking quite a sensible approach to this legislation. This appears to be a pretty clear-cut case of abandonment by the owner and the council concluded that after months of trying to engage the owner in a discussion about the property that an EDMO was the best approach to getting this home back into use.
Although this is the first, there are other EDMOs in the pipeline Norwich City Council announced last week that they were on the verge of applying for one, and half a dozen or so other councils across the country are in a similar position.
This is welcome news, but of course the real indicator of success is not how many EDMO s are made but how many empty homes come into use as a result. The impact of legislation can and should be much wider than the amount of enforcement activity. How many empty home owners decide to bring their property back into use to avoid being caught. We may never know the whole answer. But one intriguing piece of information came out of a trip I made to Manchester late last year. Manchester City Council has started using the new legislation on fifteen occasions since last July. But each time the owner has either sold or let the property.
Although this is the first, there are other EDMOs in the pipeline Norwich City Council announced last week that they were on the verge of applying for one, and half a dozen or so other councils across the country are in a similar position.
This is welcome news, but of course the real indicator of success is not how many EDMO s are made but how many empty homes come into use as a result. The impact of legislation can and should be much wider than the amount of enforcement activity. How many empty home owners decide to bring their property back into use to avoid being caught. We may never know the whole answer. But one intriguing piece of information came out of a trip I made to Manchester late last year. Manchester City Council has started using the new legislation on fifteen occasions since last July. But each time the owner has either sold or let the property.
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