Five things the government should do about empty homes

Zac Goldsmith was kind enough to name check the Empty Homes Agency on the Today programme this morning. He suggested that instead of “garden grabbing” which the government announced it would be restricting , “there are a lot of empty homes lets find ways of incentivising getting them back into use”

All very encouraging. Zac Goldsmith is of course not a member of the government (yet) but this is just the latest in a number of suggestions by people in and around the government that they will introduce measures to deal with empty homes soon. I met Grant Shapps last week and he said nothing to dispel the belief. But what should they do? Here’s what I think


1. Change grant rules to give housing associations a real incentive to buy and refurbish empty homes, and give greater flexibility so that homelessness charities and other community groups can refurbish empty homes too.


2. Government and public sector landlords should hand over surplus properties to local communities for them to bring back into use. Councils should be encouraged to do the same.


3. Give homeowners incentive to refurbish their own empty homes by reducing VAT rates on refurbishment to 5%. It is particularly important that special provision is made for refurbishment if the overall VAT rate rises.

4. Councils should be encouraged to act by extending the government’s proposed council tax incentive scheme (which rewards councils for getting homes built) to long-term empty homes returned to use.

5. Keep council powers including Empty Dwelling management orders. Without them council’s effectiveness is reduced. We agree that they should be amended but please don’t repeal them.

more vacancy, but 3 ways to resolve it

Yesterday the Guardian reported that the housing vacancy rate is an enormous 25% higher than previously thought. That means that across the UK there may be 450,000 long-term empty homes. As they correctly point out this is enough to house a quarter of the families on housing waiting lists in this country. Now I know there are people that will say this is an oversimplification and Shelter will go on about needing to build new houses. Well are both are true but that doesn’t take away the significance of these findings.

Just imagine for a moment what would happen if a government introduced measures that really dealt with the problem. What would that do? Well, allowing for the difference between UK and England data , 450,000 homes would house 1.1 million people. As this graph shows, that’s enough to re-house every overcrowded household in England, everybody in temporary accommodation and every single homeless person. No mean feat!

Now, some will say, it’s just a one-off – homeless households just keep forming. Well true enough, but bringing empty homes back into use can carry on too. Once the 450,000 are back into use, there would no doubt be a whole load more homes that had become long –term empty. Getting those back into use would continue to address new housing need. Eventually of course the numbers of empty homes would run right down and as a source of new housing. But that’s a good thing. It would mean that the country was using it’s housing stock at optimum efficiency, which would in itself reduce the numbers of people falling into housing need, and massively reduce expenditure in dealing with the effects of the problem.

So what would a government have to do to really make an impact? We think just three actions would do it:

1. Offer a financial stimulus to the building industry by redirecting part of the national affordable housing programme towards refurbishment of empty homes. The Liberal Democrats estimate that £3.3bn (out of a £17bn programme) would bring 250,000 homes into use.
2. Encourage councils and public sector landlords to hand over surplus properties to local communities for them to bring back into use. And encourage them to help owners get their homes into use.
3. Give home owners incentive to refurbish their own empty homes by reducing VAT rates on refurbishment to 5% - The FMB estimates that this would have a net cost of £102m-£550m

It’s not difficult or unaffordable. Indeed all of the costs would offset other costs elsewhere. And it’s not politically unrealistic either. Between them the three main political parties endorse all of these proposals. We just have to hold them to it and encourage whoever forms the next government to introduce all three.

A failure to tackle empty homes? perhaps, but no lack of ideas

Shadow housing minister Grant Shapps strongly criticised what he called the government's failure to tackle empty homes in Inside Housing this week.
(The government) he said “have utterly failed to tackle the glut of empty homes we have sitting empty while families are desperate for a roof over their heads.” Is he right?

With political parties all furiously putting together their election manifestos this might be a good point to look at what each of the main parties have done and what they promise on empty homes.

First the Government. Since it’s been in power it’s actually done quite a lot.
It amended VAT rules so that works on properties empty for two years or more are charged at a reduced VAT rate.
It introduced the housing market renewal programme that was tasked with reducing vacancy in the most depressed housing markets in the England
It has introduced a capital allowance scheme that allows owners of shops to offset tax on the costs of refurbishing empty flats above.
It introduced flexibility for councils to set their own council tax discount on empty homes.
It introduced empty dwelling management orders allowing councils to take over the management of long term empty homes.
But the success has been mixed. Since they have been in power empty home numbers have reduced significantly, but they have crept up again in the last three years. Take up of tax relief schemes is low, 45% of councils still offer full discounts on empty homes and to date there have only been 24 EDMOs.

What is it saying now? Over the last year the government’s comments on empty homes have been very much geared towards making EDMOs work. It has run a seminar for councils and has endorsed the EHA’s guidance on EDMOs. There have been no new policy promises

The Conservatives haven’t of course been in government for eleven years, but locally Conservative administrations in London Birmingham and Kent have devoted attention and resource to councils to tackle the issue. There’s been significant success in Birmingham and Kent, but it is too early to judge what’s happening in London. In their recent housing green paper the Conservatives promissed two measures to tackle empty homes :
The empty property rescue scheme would divert affordable housing resources to reusing empty homes, and would temporarily reduce requirements to encourage take up.
Extending and reinvigorating the PROD (public request ordering disposal) scheme giving power to people to request the sale of long term empty publicly owned buildings and extending it to all government bodies and quangos.

The Liberal Democrats have set out several measures in recent months to tackle empty homes.
Equalise VAT rates on renovation and new-build.
Amend commercial property rate relief rules to allow owners of empty commercial property used temporarily as housing to continue to claim rate relief.
Introduce a Repair and Renewal loan scheme for owners of empty properties if they agree to lease them for at least five years to housing associations as social housing.
Allow housing associations and local authorities to use funding from the Homes and Communities Agency to refurbish newly purchased private empty homes.
Make £40m available in Homes and Communities Agency grant for short-life housing.

So is Grant Shapps right? Well that’s your call. But the significant thing is that all parties have a lot to say on empty homes. In the run up to the last general election none of the parties even bothered mentioning it. The empty homes problem may be getting worse, but at least, now there is a real debate on how to tackle it.

VAT on Refurbishment- Fantastic News

Why is VAT levied on the maintenance and repair costs of homes, when building new buildings is zero-rated? There can be few more illogical taxes and few that so blatantly promote environmentally damaging behaviour over green behaviour. Hardly anybody even tries to defend it anymore. The government’s traditional response is they’d like to change it but they can’t because of European rules. Well yesterday that excuse disappeared.

ECOFIN TheEuropean Economic and Financial Affairs Council agreed to allow member states to reduce VAT on housing repair and maintenance. The ruling is a triumph for the Cut the VAT campaign lead by the Federation of Master Builders. The Empty Homes Agency is a supporter and active member of the campaign. Reduced VAT would make it more cost effective to bring thousands of empty homes back into use.

With their best excuse gone will the governemnt try and find another one or will they grasp the oppurtunity to reduce VAT? In my view it is the single most importatn thing they could do to tackle our empty homes crisis