November

2007
THE EMPTY HOMES AGENCY
Monthly News Bulletin

Empty Homes Agency, Downstream Building, 1 London Bridge, London, SE1 9BG
Tel: 020 7022 1870 Email: [email protected]
Statements in this newsletter are for guidance only and the Empty Homes Agency will not accept
liability for losses resulting from reliance on them. Professional advice should always be obtained.
Table of Contents

1 A Word….
2 Call Out! - National Week Of Action 2007
3 Opening bids: Why the Government must do something
about Britain’s empty properties
4 Why are they empty? Lorna Blackwood – The Times
5 Agency Backs Move On Empty Homes
6 News
7 Events
E M P T Y H O M E S A G E N C Y

1
A Word…
David Ireland, Chief Executive

Government announcements on empty homes are like buses you wait ages for one then four
turn up at once. So it was with the comprehensive spending review earlier this month. 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 as we have been calling for, 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. We criticised the government for initially leaving empty homes out of
this grant. See our response to the consultation here. 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 (BVPI 64). 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.

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See also:
2
The Times Comment Piece Why The Government Must Do Something About Britain’s Empty
Homes

The Times Why Are They Empty?

The Guardian Agency Backs Move on Empty Homes

David Ireland
Chief Executive
Empty Homes Agency
Tel: 020 7022 1867
Email: [email protected]

Call Out! - National Week Of

Action on Empty Homes 2007

What are you doing for National Week Of Action on Empty Homes?

This year the Empty Homes Agency are organising a high-profile media campaign to
highlight the wasted empty properties across England, and to increase awareness of
all the work being done across the country.

We would like all organisations, local authorities or anyone that deals with empty
properties to let us know if you would like to or indeed have planned anything for the
National Week Of Action 2007 – December 3rd – 7th 2007.

All queries and information should be sent to Shashi Ioannides at

[email protected] or you can call on 020 7022 1870.

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E M P T Y H O M E S A G E N C Y

3
Opening bids: Why the Government
must do something about Britain’s
empty properties
Cartoon Home Truths by Tony Hubbard

Anne Ashworth – The

Times

THE archetype of “property

porn” is a Georgian
townhouse, painstakingly
maintained but also kitted
out with every modern convenience, a blend of Gaggenau kitchen appliances and
Farrow & Ball-painted original cornices. But some people’s pulses race at the sight of
an empty house – Georgian, Edwardian, Modernist, whatever – in need a thorough
makeover. The scope for such feelings is now considerable. There are 840,000 empty
properties in Britain, to be found in smart and scruffy neighbourhoods.

The derelict house on an otherwise spruced-up street is a familiar sight. Some

properties included in the empty dwellings figures are new-build flats, purposely left
untenanted. But most have suffered years of neglect, usually at the hands of their local
authority owners.

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E M P T Y H O M E S A G E N C Y

There is a growing sense that these properties should provide some of the solution to
the housing shortage, providing affordable homes for first-time buyers and others. It is,
after all, kinder to the environment to refurbish an old property than build new homes on
green-belt land. Last week’s Autumn Budget seemed to promote this strategy. Local
authorities will receive the same reward via the Housing and Planning Delivery Grant for
bringing an old terrace back to life as for building a flat on a new estate.

But the perverse incentives that ensure that so many properties remain empty will
continue for the moment, although it is under review. The private owners of such homes
may still receive a 50 per cent council tax discount.

The Autumn Budget changes would seem to provide little incentive to buy and fix up an
empty wreck. But councils can decide how to spend their cash. They may look kindly on
an application for funds from an individual who has fallen for a home that has fallen on
hard times.

As in all affairs of the heart, a little boldness can pay off; you will not necessarily be
disqualified on grounds of income. You will also enjoy the warm feeling that your new
neighbours will be in your debt: homes next door to empty derelict properties sell for an
average of 18 per cent less than similar homes elsewhere.

SLOWDOWN OR SLUMP?

Most of the 15 (it’s a crowded sector) regular UK house price surveys continue to
forecast slowdown or stagnation. But the view from Washington is bleaker. The
International Monetary Fund is forecasting a US-style slump for the UK market.

Among other things, its gurus point to the performance of house prices since 1997: the
average house price is up over the past decade from £68,777 to £198,898. They contend
that just 60 per cent of this increase can be justified by such factors as rising incomes:
there is no explanation for the other 40 per cent, suggesting a state of delusion and
potential for a correction. In short, the market is like a cartoon character that steps off a
cliff and starts to fall only when he realises that he is walking on air.

At the same time, the IMF’s experts concede that their analysis contains “considerable
uncertainties”. These include factors that have boosted and should continue to support
prices, such as the shortage of homes and demand from immigrant workers.

Even the gloomiest UK commentators could not be won over to the IMF’s pessimism.
Sub-prime lending is the principal cause of the US market’s woes: borrowers with poor
credit records were given loans they could not repay and are now finding their homes
being repossessed. Sub-prime lenders also flourish in the UK and their customers are
more vulnerable to repossession than other homebuyers.

But this is a small-scale business compared with the giant US sub-prime industry. Its
watchdogs also seem to have been not in the least concerned about its activities. For the
sake of the health of our housing market, we hope that our watchdogs are being more
vigilant.

HAVE PRICES GONE UP IN SMOKE?

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E M P T Y H O M E S A G E N C Y

The smoking ban has produced several lifestyle changes. People who like a cigarette
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have now become the outsiders, lurking around the entrances of offices, or standing by
pub doors, whatever the weather. A few are “smirting”, that is flirting while smoking, while
others are shouting to make themselves heard over the hubbub. In the commercial
districts of city centres these congregations can lend an agreeable whiff of café society to
streets that used to fall silent every evening. But in residential areas these crowds can
seem more like riotous assemblies, producing noise and litter.

As a result, it is becoming harder to sell a house close to a pub or bar. North London
estate agents say that such proximity can reduce a price by as much as £50,000. This
presents the opportunities for property bargains, provided you can shrug your shoulders
at cigarette butts tossed into your front garden and the sleepless nights that come from
intoxicated youths singing She’s So Lovely or some other current hit at the top of their
voices outside your bedroom window.
[email protected]

Why Are They Empty

Lorna Blackwood investigates the mystery of the
UK’s million vacant homes – The Times

THE urgent need to build more homes is exercising industry experts, homeowners
and officials across the country. Undersupply is blamed for fuelling the massive price
rises in recent years, which have pushed home-ownership out of the reach for many.
But, as the Government cajoles housing associations, developers and councils to get
three million new homes built by 2020, questions are being raised about the number
of buildings that lie empty. The Government signalled its determination to tackle the
issue in the Chancellor’s PreBudget Report, which promised measures to help to
bring empty homes back into use. Details of the scheme were sparse. Bricks and
Mortar spoke to industry experts to find out what it means for householders.

How many empty properties are there? The Empty Homes Agency estimates
that there are 840,000 empty homes in the UK. National Land Use Database figures
indicate that a further 420,000 homes could be established in disused commercial
properties in England, including former pubs and space above shops. This adds up to
more than one million additional homes – which would make up a third of the
Government’s three million target.

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E M P T Y H O M E S A G E N C Y

Why are so many properties left empty? Sadly, information on who owns these
buildings and why they have fallen into disuse is patchy. The job of monitoring
empty properties and bringing them into use falls to local councils, and until recently
there was little incentive for them to devote resources to the task.

The Empty Homes Agency points to two main causes. Many homes remain empty
because they are in a very poor condition – perhaps needing a new roof – and the
owner is unable or unwilling to spend the money to put things right. Once a home is
empty, its condition can quickly deteriorate, pushing the cost of making the home
habitable still higher.

Another factor is speculation, where a buyer has bought a property for its
investment potential but does not wish to find tenants. David Ireland, chief
executive of the Empty Homes Agency, says that this is a growing problem,
especially in the new-build market, which has attracted “buy-to-leave” investors who
take the view that keeping the property empty will extend its new-build premium.
House prices in recent years have made this worse, as generous capital appreciation
has reduced the need of some buyers to secure rental income.

What is the Government doing to bring empty homes back into use? The
Chancellor introduced three initiatives: An extension of the VAT reduction that
applies to work on the renovation of empty homes. Experts describe the current
difference in VAT rates between new-build (0 per cent) and refurbishment (17.5 per
cent) as perverse. Now a property will need to have been empty for only two years,
down from three, for the owner to be eligible for the discounted VAT rate of 5 per
cent for refurbishment. Local authorities will be encouraged to reduce the 50 per
cent council tax discount on empty homes, which gives owners a financial incentive
to keep their properties vacant. The inclusion of homes that are returned to use
within the Housing and Planning Delivery Grant system, which gives financial
incentives to councils that meet housebuilding targets.

Local authorities will get the same reward for bringing homes back into use as for
encourageing new-build development. However, the Chancellor also said that
councils will no longer have to keep a register of the empty homes returned to use.
The Government says this will reduce bureaucracy but, as David Ireland says, “how
can you reward a council once you remove the empty homes target?”

Should I be worried that an empty property will attract crime? This is a

major problem. Once a little thing goes wrong (such as a broken window), crime and
vandalism, including fly-tipping, escalate. Arson is a major problem: the London Fire
Brigade estimates that one in every four fires they attended last year were in empty
homes.

So, will I be able to get help to do up my empty property? Local authorities

are to decide how they spend their Housing and Planning Delivery Grant – some may
prove willing to help individual homeowners.

Is squatting a problem? There are no official figures. Experts say it is no more of a

problem than in the past. And in certain circumstances the taking over of a building
by “professional squatters”, who may look after the property and make it secure,
may reduce vandalism and crime. But many squatters will leave a property in a far
worse condition – and will prove incredibly hard to evict.

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E M P T Y H O M E S A G E N C Y

Does an empty property bring down neighbouring house prices? Sellers have
complained about this. A Home-track study in 2003 reported that, on average, a
property next to an empty house sells for 18 per cent less than one that is occupied.

What can I do if there is an empty property in my street? Inform your local

council, which has the power to place an empty dwelling management order
(EDMO). If the council is not helpful – it may even be the owner of the property – a
local campaign could work. Visit www.emptyhomes.com to read about successful
local campaigns.

THE STEPS THAT YOU CAN TAKE

AN EMPTY home is an asset at risk. It should be making you money, not causing
expense. Empty homes deteriorate rapidly, attract vandals and are more costly to
insure, not to mention eventually repair. So if you own an empty property, here are
your options. If the property is in good condition you could:

Act as landlord and let it yourself, or through a private rental agency (contact the
National Approved Letting Scheme, www.nalscheme.co.uk). Fees vary from agency
to agency. In some cases, you can let your home cheaply in exchange for your
tenant agreeing to complete certain minor refurbishment work, but ensure that you
have a watertight agreement in writing.

Let your property through your local council under a private leasing scheme. You
grant a lease on your property for a certain number of years and the council acts as
managing agent. You would be responsible for external and structural repairs,
maintenance and building insurance. Councils usually charge one month’s rent a
year, but details vary.

Let your property through a housing association under similar conditions to those
listed above. To find out more about both options, contact your local council’s empty
property officer.

Sell your property to a housing association under an “existing satisfactory purchase”

scheme. The advantage is a relatively quick sale and a saving on estate agency
fees.

Sell your home on the open market. If your property needs renovation you could:

Seek a grant from your local council for refurbishment costs in exchange for a lease
on the property.

Approach your local housing association. Some will pay either full costs or a
percentage of refurbishment costs in return for a lease at a reduced rent.

See if your property is dilapidated enough to qualify under a housing association’s

purchase-and-repair scheme.

Sell your home by auction. Contact the Royal Institution of Chartered Surveryors
(www.rics.org ) for a list of local auctioneers.

THE SCANDAL OF BRITAIN’S EMPTY HOMES

Do you have an empty house in your street? Does it make you angry? Send in your
photos and we’ll compile a “rogues’ gallery”. And while you’re at it, let us know your
solution to the problem at: timesonline.co.uk/property

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E M P T Y H O M E S A G E N C Y

5
Agency Backs Move On Empty Homes
Debbie Andalo – The Guardian
Chancellor Alistair Darling was praised by the Empty Homes Agency for promising
in the comprehensive spending review last week three new measures that the
campaigning charity predicts will help bring some of the 700,000 empty homes in
England back into use.

But the agency's chief executive, David Ireland, expressed disbelief that Darling
also announced that, to reduce bureaucracy, local authorities will no longer have
to keep a register of the empty homes they have returned to use. He says it
makes a mockery of Darling's announcement in the same speech that the housing
and delivery grant programme, which currently rewards councils for identifying
new land for housing and building new homes, will in future also apply to empty
homes local authorities have brought back into use.

Ireland says: "It seems bizarre. How can you reward (a council) once you remove
the empty homes target? It just seems to be a question of different bits of
government not talking to each other. It's not joined up at all."

However, Ireland did welcome Daring's decision that the renovation costs on
homes that have stood empty for two years will be liable only to 5% VAT, rather
than the current 17.5%. The agency predicts it could affect 100,000 homes
currently standing empty.

The agency also applauded the government's intention to review council tax
discounts available on empty homes. Homeowners are exempt from council tax
for the first year a property is empty and up to a 50% discount thereafter.

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6
Empty Property News

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

The property market - October 28, 2007

Times Online - UK
From January 1, Vat on renovations to homes empty for between two and three years will be
slashed to 5%. Currently, that discount on the normal 17.5% rate ...

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Government offers cash incentives to ease housing shortage

Times Online - UK
We want to give more support to communities and councils who are doing their bit to deliver
the extra housing needed, including bringing more empty homes ...

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Unite welcomes cash boost for affordable council homes - 26th October 2007
Politics.co.uk - London,UK
Commenting on bringing empty homes back into use Mr. Dromey, who campaigned for the
powers that councils now have, said, "Empty homes in communities full of ...

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Extra 3m homes 'will not stop prices rising' - 26th October 2007
Telegraph.co.uk - United Kingdom
Also included in the plans is a £510m fund to help bring empty homes back into use. Councils
who aggressively target empty properties, including through ...

+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++

Will there be a rate cut before Christmas? Kate Barker knows - but ... 26th October 2007
Times Online - UK
But images of decay and dilapidation have been appearing, after our report last week on the
scandal of Britain's 840000 empty homes. ...

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For more latest news please visit us:

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http://www.emptyhomes.com/aboutus/latestnews/latest_news.html

E ve n t s

Date: 5th-6th November 2007 - QEII Cobference Centre, London

Event: Environmental Futures - Adapting To Change

To view the full agenda, speaker line-up and seminar programme visit
http://www.neilstewartassociates.com/sw110/

For further information contact Natasha McDonough on 020 7324 4330 or email
[email protected]

Date: Tuesday 6th November 2007 - Central London

Event: Building Affordable and Sustainable Homes Conference
Implications of the Housing Green Paper

For conference agenda and booking form please click here or email
[email protected].

Date: Thursday 29th November 2007, Commonwealth Club, Westminster

Event: Solving the Housing Shortage: Meeting the Challenges and Implementing New
Strategies Locally

For more details please contact Nick Rotsides on 020 7096 2916

Date: 3rd - 7th December 2007

Event: National Week Of Action 2007

For more details please click here

* * * * * * * * * * * * *
For more info please look at our website:

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E M P T Y H O M E S A G E N C Y

http://www.emptyhomes.com/aboutus/events.html

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