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Nobody Home
Local Government Chronicle – 27 November 2008

As the recession bites, an increase in empty homes is blighting areas. Mark Smulian reports on how they can be turned into affordable housing

Almost every lobby group at some point declares a 'week of action', and the last week of November has been bagged by the Empty Homes Agency (EHA) charity.

Most such 'weeks' pass unnoticed by those not closely involved. Indeed, the comedy show Round The Horne used to debunk the whole concept with announcements of fictitious events like 'Cover a Goat in Strawberry Jam Week'.

But the agency may have picked its week well, coming as a recession threatens to sharply increase the numbers of people looking for affordable housing.

Data collected by the EHA shows there were 762,635 empty homes in England in 2007, the equivalent of a fair-sized city, against 748,159 the previous year.

As chief executive David Ireland puts it: "Nothing that has happened in the last year is likely to have reduced that. The credit crunch has made a huge difference and the progress we had seen over the past two years of a reduction in the numbers of empty homes has been reversed."

The Royal Institution of Chartered Surveyors projects repossessions will reach 45,000 this year against only 12,000 in 2007. Two other factors have combined to increase the number of empty homes.

Small-scale developers, who might buy empty properties in better times to renovate and sell, now find it hard to raise finance. Therefore the normal 'churn' of empty home refurbishments has seized up.

The second is that many regeneration projects, particularly in housing market renewal areas, have reached roughly the same stage and so "whole estates are boarded up waiting for a redevelopment that now may be difficult to finance", Mr Ireland says. He urges the councils concerned not to board up such homes, but to use them for short-life tenancies.

Despite these pressures, he feels that councils' focus on empty homes has slackened as a consequence of the pruning of the best value indicators relating to empty properties.

"When we lost the performance indicator, I did not make a fuss since a council is unlikely to do something well if it's doing it just because the government tells it to, but some councils have said they feel the loss of that indicator means the government no longer sees empty homes as very important, so they don't either."

Even so, councils have extensive powers to deal with empty homes and some have made important innovations where they have decided that vacant dwellings are not only a waste of housing, but have wider negative effects. Areas that are filled with dilapidated or boarded-up homes soon become targets for vandalism and anti-social behaviour, and unattractive to investors, leading eventually to far larger bills for regeneration work.

The scale of the problem makes it somewhat surprising that empty dwelling management orders (EDMOs) - the power that councils gained in 2006 to temporarily take over homes left empty without good cause and rent them out - has so far been used a mere 15 times, five of them in Lewisham LBC alone.

Susan Wise (Lab), its cabinet member for customer services, says: "We find them useful where there are long-standing empty properties where landlords will not do anything. I think an EDMO is much simpler and cheaper than a compulsory purchase order."

Mr Ireland says councils have had considerable successes merely by threatening landlords with an EDMO, an action not shown in the statistics. "There is a financial problem with EDMOs though, which is that there is no money up-front from the government with them," he says.

"A council can have to pay for costly repairs before a home is habitable and although they can recover that from rent, that can take years and they may not be able to afford it."

Great Yarmouth BC has successfully used a different approach, and now offers a consultancy service to other councils on how to use compulsory purchase orders (CPOs) on empty homes.

Chris Skinner, head of central services, says some 15 councils have used the service. "We offer 15 to 20 years' experience of dealing with CPOs and a 100% success rate. And we keep costs down for something that is potentially expensive," he says. "It's not just the legal service offered, but our experience of different situations and knowing how to react."

According to Mr Skinner, Great Yarmouth brings five to 10 homes a year back into use through CPOs or the threat of them, but it has never used an EDMO. "It does seem to me that there are quite limited circumstances in which an EDMO has an advantage over a CPO," he says.

"If you have a CPO you take over the property and it's done once and for all, whereas with an EDMO you eventually have to give it back and there is a risk you are out of pocket with refurbishment costs."

Another route to getting empty homes used is to withdraw the council tax discount on them. Solihull MBC is among councils that have decided to scrap a 50% discount from next April in the hope of bringing some of the 1,300 empty homes on its patch into use.

Ken Hawkins (Con), cabinet member for resources, says: "Empty homes are a blight on our borough. Some homes are left empty, with no maintenance, and become ugly eyesores that attract vandalism. We'd like to see these homes brought into play for borough residents."

London mayor Boris Johnson has been active on empty homes, and launched a 60m package in July to tackle the capital's 84,000 voids. "It is an absurdity that so many properties are empty in London when families are languishing on council housing waiting lists desperately hoping for a home," he said. "Empty properties cannot be left to rot and blight local neighbourhoods."

Mr Johnson's enthusiasm somewhat glossed over the central problem of relying too much on empty homes to meet housing need, as opposed to purpose-building new homes.

The problem with empty homes is that they are what they are, and they are where they are. They do not fit neatly into housing management plans or strategies for mixed communities. And they may not be the type of housing needed.

Dino Patel, London region manager of the National Housing Federation, says: "Of course we want to see empty homes lived in, but they can be in a poor state. If they just need a lick of paint then we're talking, but they can need renovations that are so costly that new build would be cheaper."

Renovated empty homes can also be problematic for social landlords, since "a housing association could find it takes on empty properties scattered all over the place and it's difficult to manage them or provide services to tenants," Mr Patel adds.

"I'm not knocking the idea, but it has to be carefully handled if you are not to store up problems for later years."

This also applies to the empty new homes that the house-building industry is increasingly seeking to interest the public sector in buying, the property crash having made them otherwise unsaleable.

Abigail Davies, head of policy at the Chartered Institute of Housing, says: "Social landlords learnt a lesson in the 1990s recession when they bought a lot of what proved to be low-quality homes in the wrong places and of the wrong type, and this time round they are far more picky because for once they have the upper hand and can make some good deals.

"The main demand is for three to four bedroom houses in the social sector, so there is not much point in buying large numbers of one-bedroom flats, which are a lot of what is available."

Local authorities can do a lot to meet housing need by using creative ways of financing the use of empty homes. They should, though, perhaps inspect these gift horses' mouths thoroughly first to make sure they will not prove a costly burden.

No use empty

KENT CC Kent CC set up No Use Empty in 2005 with a 5m fund to bring homes in the county's less-prosperous east back into use, when it found 9,000 longterm empty properties were blighting neighbourhoods. It has since been extended to the whole county. No Use Empty works by loaning up to 25,000 interest-free to property owners, or those thinking of buying an empty home. Owners repay the loan from rent or when a property is sold.

Andrew Lavender, consultant manager, says the scheme has brought 487 homes back into use and this total is expected to exceed 600 by April.

"We've had five or six councils come to see how it works," he says. "The credit crunch has meant there are keener prices for refurbishment work and we have got a steady supply of applicants."