Empty homes policy launch

Details arrive at the Voice of a launch of our General Election housing policy:

The Liberal Democrats today set out plans to bring a quarter of a million empty homes back into use, making homes available for people who need them and creating 65,000 jobs.

There are over 760,000 empty properties across England which are no longer used as homes but can be brought back into use with some investment. People who own these homes will get a grant or a cheap loan to renovate them so they can be used: grants if the home is for social housing, loans for private use.

The plans form part of the economic stimulus package outlined as a core principle of the Liberal Democrat election manifesto. In the first year of the new Parliament, the party would redirect over £3.6bn of spending to create jobs and build up Britain’s infrastructure. In the following years this money will be redirected to other Lib Dem spending priorities and reducing the structural deficit.

This is excellent news, and win-win-win-win territory. Homeless families win – increasing the housing stock makes it easier to find a home. Owners of empty properties win because it helps them turn a burden into an asset. It’s good for the environment because restoring existing properties is more carbon-efficient than building new homes from scratch, and because it can help councils resist green-belt development and new land take for housing. Providing more housing in existing communities also helps with transport and infrastructure planning. Local authorities win because occupied homes pay council tax, whilst empty ones often don’t. And it’s a win for employment and jobs since getting 750,000 homes up to standard is going to take a lot of employees to do.

And as well as all those wins, it’s a good thing for all those of us living in streets with empty homes that make our streets look deserted. And if, like me, you’re living in a semi-detached house with no neighbour, it would be good news for my heating bill not to have a cold empty house leaching my heat by conduction through the party wall!

Perhaps we could go a little further? Currently there is no statutory responsibility for councils to tackle empty homes in their areas and for many, this is not a priority. Where they exist, Empty Homes Officers can often have a huge workload and have to concentrate their efforts into the worst, most dangerous properties in their areas, whilst the more easily relettable ones lie empty. And the longer they’re empty the harder it will eventually be to bring them back into use.

Existing powers such as Empty Dwelling Management Orders (EDMOs) are unwieldy and seldom used. They have numerous failings as this piece by Peter Black from Freedom Central explains. And even when councils are minded to use them, they are an expensive tool which must be funded from existing resources. Manchester councillor Iain Donaldson has called for greater central funding to be available to help use EDMO legislation more widely.

One final useful link: if there’s an empty home in your street, you can report it using Shelter’s ReportEmptyHomes.com website. It will take details from you about where the home is and pass them onto your local authority. If your council is on the ball, they can respond with what they are doing about that property to bring it back into use.

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22 Comments

  • Tony Theaker 14th Jan '10 - 3:47pm

    I certainly welcome the main points in this launch. Addressing the problem in which Councils can add charges to properties for bringing these empty homes into use, but do not actually have the monies in the general fund to afford the works in the first place, at least to impact any significant quantity of Empty Homes is vital. I have always thought this could be done by using the Homes and community agency and allocating some of its budget to this area, almost like an empty homes bank. One issue which I do feel strongly on is the actual definition of an empty home. We have over a 1000 defined empty homes, but a surprisingly large percentage of this figure cannot be touched by legislation/enforcement even if we had the money, as although classed as empty are not legally so, such as when a Council/care home begins providing residential care for an individual and their house is the only asset that they possess capable of covering the bills, meaning that houses may sit empty for months, if not years but legally are not reachable by present legislation.

  • Andrew Duffield 14th Jan '10 - 4:20pm

    “People who own these homes will get a grant or a cheap loan to renovate them so they can be used: grants if the home is for social housing, loans for private use.”

    We still don’t understand basic economics it seems. Why give public money to those fortunate enough to own property who keep it out of use for speculative reasons? All this will do is stoke property values again, inflate rents and keep affordable homes out of the reach of the poor.

    How much more sustainable, socially just and fiscally positive to TAX those empty properties (the sites, not the buildings) to bring them back into productive use AND raise revenue for our beleaguered exchequer !

    If SVR / LVT is good enough for bringing empty commercial sites into use, why not domestic ones?!!

  • Are those empty houses the sort of houses people want to live in in the areas people want to live in?

    I’ve known areas with lots of very cheap and unsellable/lettable empty houses

  • David Cooper, Newbury 14th Jan '10 - 9:39pm

    Jock, Andrew, I agree.

    This is an typical example of big government thinking- I’m from the government, and I know how to spend your money better than you do! So shell out more tax to fund my latest wheeze…

    If it made economic sense to bring these homes into use, it would have been done by the owners already. The fact that it has not been done shows there is no case.

    Taxpayer’s money spent on repairing these houses will be diverted from better uses achieving higher returns, such as building homes where they are needed and infrastructure development. Economic stimulus money should be spent where it achieves the highest returns.

    The proposal is not “win-win-win-win territory”. Homeless families will be shunted into unwanted properties, while the owners of these properties will benefit from subsidized loans from the taxpayer, which enables them to extract rent from marginal holdings.

    The solution for unused property is not provide their owners with gifts from the taxpayer. It is to tax land values. If there is a true case for renovating a derelict house, the market value of the parcel of land it sits on reflects this fact, since there is a development opportunity. A tax based on the empty land value will soon motivate its owner to repair the house or sell out to someone who will- thus providing an engine that motivates needed building and development. If there is no economic case, the parcel of land is anyway of low value; gifting taxpayers money to its owner in order to build where there is no demand is irresponsible.

    This proposal is in the worst tradition of tax and spend, and must be ditched.

  • Malcolm Todd 14th Jan '10 - 11:17pm

    Could anyone direct me to a good (and preferably concise – short attention span) explanation of LVT? Including in particular how you assess the land value, which on the face of it is the trickiest part. (Sorry if this is back to kindergarten for some of you – I didn’t spend 20 years in the Liberal Party…)

  • David Cooper, Newbury 14th Jan '10 - 11:42pm

    Malcolm

    The most informative site is the land value tax campaign, which has a good FAQ section:

  • David Cooper, Newbury 14th Jan '10 - 11:43pm

    Sorry, I meant to add a link:

    http://www.landvaluetax.org/

  • Win-win-win-win seems pretty optimistic to me.

    First, the Halifax reported (April 2008, the most recent available), that there were 303k houses in England (and so probably c. 350k in the UK) that have been empty for over 6 months. By international standards the number of empty homes in the UK is relatively small. The Barker Review has the full data if anyone is interested. There are other buildings that used to be houses but which are not habitable, but the bill for restoring these could be considerable per unit, and would need to be assessed carefully on value for money criteria – including environmental vfm. Restoring a house with no cavity walls, for example, almost guarantees a high carbon footprint in the future, compared with new build.

    Second, I am with others that giving money to people who own second homes that are run down is not appealing. At least we ought to get a share of the freehold (something I proposed in a different context in Cities Unlimited)

    This scheme also raises the possibility that anyone with a second home in not-very-good condition (perhaps a house inherited from a parent that was in need of significant modernisation) might well decide that the most profitable thing to do was to leave it empty until the council decide to through our money at it. If that happens we could end up with this scheme increasing the number of empty homes, despite spending a lot of money, as people wait to be eligible.

    Unoccupied houses **are** generally in areas in which people are less likely to want to live. The Halifax found that “Fifteen of the 20 local authorities with the highest proportions of long-term empty private homes are among the 25% in England with the highest levels of deprivation”, & “Areas with relatively high levels of long-term empty private homes have lower than average earnings. Eighteen of the 20 local authorities where 3% or more of all private homes have been empty for at least six months have levels of average earnings that are below the national average. The levels of earnings in these locations are, on average, 24% below the national average.” More generally, only 1.1% of houses in London, the SE, and the SW are unoccupied for more than 6 months, whereas the figure is double that in the NW, & Yorkshire. You can read the stuff here: http://www.lloydsbankinggroup.com/media/pdfs/halifax/211109EmptyHomes.pdf

  • i’m not going to enter the lvt side of this debate but compared to our housing policy in previous elections this idea seems ok but considerably weaker than 2005. to take the parochial example of oxford which does have huge housing need, a massive homelessness problem, no brownfield land supply and very few empty properties this won’t make a difference.

    what has happened to previous ideas around community land auctions of green field sites?

    also i see from the notes in the press release that these properties will not be subject to right-to-buy. does this now mean we agree with rtb for other properties? what happened to right-to-invest and golden share schemes? they were solid policies.

    finally according to the spreadsheet oxford has over 4,500 empty homes. this is utter rubbish, and is closer to the number of shared student houses across the city (over 5,000) so the figures are clearly the number of households that don’t pay council tax, which is clearly a completely different thing! there are maybe a few hundred long term empties in oxford.

    the point has been made about the disparity between empty homes and the areas people want to live. obviously i agree with this, it’s not going to help many of the families in cities like oxford who are in overcrowding hell and waiting between 5-10 years for a move. i doubt it will help much in many other places where there are massive housing waiting lists either. it might help a bit in some areas, but really we need two things:

    1) a significant review of green belt policy

    2) serious regeneration of areas where empty homes are. transport, jobs, employment in the regions. then talk about this stuff.

    disappointed.

  • Matthew Huntbach 15th Jan '10 - 10:09am


    If it made economic sense to bring these homes into use, it would have been done by the owners already. The fact that it has not been done shows there is no case.

    That’s typical theoretical economics speaking, remote from real human lives and common sense.

    No, real people do not work like the simplistic free-market textbooks and ideologists say they will. Walk around London, where houses will sell for large amounts of money, and you will if you look, even in the posh parts, see plenty of houses left empty to rot.

    Sometimes this is deliberate. What the owners mean by this is “I will let this old-style house rot until you give me planning permission to build a great big block of flats there instead”. OK, so now the free-marketeers are cheering me on, as they have the solution to that one. They might even say to all the people in the big posh houses who are saying “oh no, you can’t build that monstrosity here” (they are also saying “it will lower our house values” which, as the officers always used to remind us when I was on Planning Committee is NOT a planning matter) “well, if that;s the case, club together and buy the property yourselves”.

    But often it’s just the case that ownership of the house has passed to someone who doesn’t want to or cannot cope with it. This is happening a lot with lives getting longer and families getting smaller. Inheritance of a house is quite likely to be to someone who is themselves elderly. The person who inherits the house doesn’t need it, doesn’t need the money, but can’t get round to actually sorting it out and selling it. So it rots. The effort to sort out a house where a lifetime of possessions has been accumulated is huge. The effort to refurbish a house which hasn’t been touched for years (because the person who lived in it was elderly and didn’t want the hassle) is huge. So the new owners may themselves keep thinking “ok, we must do this some time” and don’t. Sentimentality stops the obvious solution – pay someone to do all that and get it off your hands. Sentimentality is also what makes people so resistant to the idea of inheritance tax. It is madness that young families suffer from being unable to afford housing, while elderly people hang on and pass on to other elderly people through inheritance housing they don’t need and can’t cope with. But you try arguing that (I have) and sentimentality will always beat you down.

    Sentimentality also beats down LVT. I fully agree LVT is the logical solution to this issue. But the “That’s so unfair – how can you make a poor little old lady with a low income living in a big house she’s been in since girlhood pay tax she can’t afford?” line will always beat the logical line. The counter-argument “If she insists, it can be all rolled up and paid from the estate after her death” will meet the sentimentality argument against inheritance tax. The wealthy people who run our media will make sure they recruit the little people through these sentimental arguments to their side, in order to defend the much bigger accumulations of serious land-based wealth they have.

    It would be nice if those who call themselves “classical liberals” and the like were to spend a bit more of their time and extreme enthusiasm for promoting their views on countering sentimentality and gradually building up the case for LVT, instead of spending most of their time cheering on the wealthy elite by concentrating all their efforts on defending those aspects of “classical liberalism” which most support the wealthy elite staying wealthy, and only when challenged by “Oh, you lot are really just Tories” will whisper “no, no, look we support LVT and the like as well”. Well, if you do GET OUT AND SHOUT ABOUT IT. You don’t need to spend all that effort you do on shouting out the lines about cutting tax and letting enterprise flourish – there are plenty of Tories who will do that for you. Do instead the more unpopular stuff that no-one else is doing and make it popular.

    With human reasoning, you do need to find nice ways to help people who own houses they can’t cope with deal with them easily, get them refurbished and sold on. Just the harsh “Otherwise you’ll pay a wacking big land tax” will sound cruel and won’t win you votes. You might also try to rouse up some of those young people whose interest it is to get these things sorted out, but who have been lulled by our bread-and-circuses culture to think politics is all dirty and not for them – so as to keep it safely in the hands of the wealthy elite.

  • Jock: Richard Kemp was (an excellent) chair of the housing group, and there were a large number of people who brought different form of expertise to the group. I was one of them, but it would be quite wrong to say that I was “the expert”!!

    Community Land Auctions are party policy, but they are in that large group of policies that are essentially dormant. We can’t (and in my view shouldn’t) force the leader or shadow cabinet to campaign for policies that they do not support. I think CLAs are in this group. (The same is true for the Tories, btw, – Michael Gove nicked CLAs from us, but Grant Shapps is not interested in them).

    And I agree with Matthew that LVT can sound cruel. That is one of the reasons that I devised CLAs, which are effectively an upfront version of LVT, payable at a point where it cannot be construed as cruel, not least because it is a market transaction, voluntarily entered into.

  • David Cooper, Newbury 15th Jan '10 - 5:15pm

    Matthew:

    The present tax regime actively encourages owners to leave properties in Britain decaying and unused, destroying our built heritage and creating an artificial housing shortage. Such behaviour is very lucrative.

    A typical highest council tax band is about £2500 per annum. This is small compared with the capital gains that arise when a prime property worth a few hundreds of thousands is sold. Foreign registered owners can also avoid capital gains tax. The advantages of leaving a property idle are considerable, since it can be sold at short notice.

    If government gives money to property owners to help them bring homes into use, it will cost taxpayer money and will not be sustainable. If the government taxes these owners, to discourage them from leaving properties idle, it will provide revenue and is sustainable.

    Sentiment might provide arguments against land value tax. But the possibility of reducing income tax by replacing it with land value tax will have a power appeal to ordinary income tax payers, as we have seen with the Mansion tax proposal.

  • “The counter-argument “If she insists, it can be all rolled up and paid from the estate after her death” will meet the sentimentality argument against inheritance tax.”

    That only really works if LVT becomes an alternative/replacement to inheiritance tax (for which there are valid arguments as they are both asset taxes) Whatever the fiscal legitimacy of introducing a tax which can be deferred until death the politiical difficulties of introducing a tax and saying “can’t pay now – don’t worry we’ll get it when you die” are huge!

  • Andrew Duffield 15th Jan '10 - 8:07pm

    “… the political difficulties of introducing a tax and saying “can’t pay now – don’t worry we’ll get it when you die” are huge!”

    I’m sure we’d say it differently Hywel ! In fact reducing tax liablities in your dotage could be quite appealing.

    In any event, your “political difficulties” are surely dwarfed by the social and economic difficulties caused by promoting a policy which actually does the OPPOSITE of what we want – rewarding, with taxpayer handouts, inefficiency, speculation and (economic) rent-seeking – at the expense of the young, the economically excluded and the asset-poor. For the life of me I cannot understand why Vince has apparently given this his blessing.

  • “I’m sure we’d say it differently Hywel !”

    We would – I’m not so sure our opponents would be quite as helpful 🙂

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