January

2008
THE EMPTY HOMES AGENCY
Monthly News Bulletin

Empty Homes Agency, Downstream Building, 1 London Bridge, London, SE1 9BG
Tel: 020 7022 1870 Email: shashi@emptyhomes.com
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 Are you en expert o EDMO’s
3 Deadline looms for Housing and Planning Delivery Grant
4 New National Indicators
5 Public support for Halifax call for action on empty homes
6 News
7 Events
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A Word…
David Ireland, Chief Executive

There is an old adage that when the US sneezes the world catches a cold. If so the UK
housing market could be in for a rough ride this year. Over the last few months we have heard
much about the subprime mortgage lending and its impact on the US economy. The American
Dialect Society even voted “subprime” the word of the year for 2007. This alarming graph
courtesy of Market Watch inc. shows another aspect of that impact.

As borrowers default on their mortgages more and more properties are repossessed and as
the housing market slows less properties are bought and rented. The result is a record
number of empty homes. In fact this graph under represents the situation because it only
shows owner-occupied homes (or should that be owner unoccupied homes?). The bare facts
are that out of a total of 127.3 million homes in the United States, 17.6 million are empty. One
in Seven!

If only the US sneeze causes only the mildest housing market cold viruses to waft over the
Atlantic, my prediction is that we are likely to see a rise in the number of empty homes in
2008. If we haven’t caught a cold yet, all the signs are that we are beginning to at least get a
runny nose. The buy to leave phenomenon or “warehousing” as they call it in the United Sates
is a problem that arose in the United States first. Repossessions in the UK according to the
Council for Mortgage Lenders are up 30%. We should know more when we see the annual
housing statistics published by DCLG. These are always published in mid December and
although already 9 months out of date when they are published they are the best data we

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have about the numbers of empty homes. This year they are late. We don’t read anything into
the delay but it we are awaiting them with interest.

Whatever is in store for us in 2008 we already know what we need to do to deal with the
consequences. 2007 saw several important moves by the government to encourage owners
to bring empty homes back into use. Changes to VAT were introduced on 1st January, and the
government is considering the options for removing council tax discount on empty homes. It
has also agreed to consider introducing empty homes into the Housing and Planning Delivery
Grant although as you will see below not exactly in the way we suggested. The government
has begun to make the right noises about empty homes, but we think it is vital that it actually
takes action and introduces measures that will help.

My apologies for the late arrival of the newsletter this month; and to everybody who tried to
contact us over Christmas. Our Internet Service Provider (who will remain nameless for fear of
defamation) switched us off in error. We are now back on-line and emails are working again.

I hope you all have a very happy and successful 2008

David Ireland
Chief Executive
Empty Homes Agency
Tel: 020 7022 1867
Email: david.ireland@emptyhomes.com

Are you an expert on EDMO’s?

Or just thinking about using EDMOs but want to know more before you take the plunge?
Either way, we’d like to hear from you. Empty Dwelling Management Orders were introduced
by the Housing Act 2004 but take-up has been very patchy so far. While some local
authorities have enthusiastically embraced them, others remain unconvinced. In collaboration
with Shelter and LACORS, the EHA is putting together a guide to EDMOs. The basic law and
procedures are fairly clear, so the emphasis of our guide is on the lessons to be learnt from
practical experience of EDMOs so far and key points to guide good practice. We’ll be
contacting some individuals we know about direct over the next few weeks, but if you have
any suggestions for the guide please let us know. It might be specific advice to others on how
to avoid a pitfall you have experienced, or a question or need you would like the guide to
answer.

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Contact Henry Oliver, Policy Advisor:
Tel.: 020 7022 1869
E-mail: henry.oliver@emptyhomes.com

(the sooner the better: we hope to produce the guide by the summer!)

Deadline looms for Housing and Planning

Delivery Grant

Last chance to have your say! – Thursday 17th January is the deadline for responses to the
Government’s consultation on Housing and Planning Delivery Grant. In our submission, the
EHA will be arguing strongly for the proposals to be strengthened so that action on empty
homes is a prerequisite for local authorities to be eligible for grant. It’s important that as many
people as possible respond and tell the Government that empty homes should be a key part
of its housing supply agenda. If you want to respond but are short of time, see the Crunch
Time? piece on pp. 10-12 of the December bulletin for the key points we’ll be making or
contact:

Henry Oliver

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Tel.: 020 7022 1869
E-mail: henry.oliver@emptyhomes.com.

New National Indicators

Henry Oliver

Just before Christmas, we responded to the Government’s consultation on the National

Indicators that are due to succeed the Best Value Performance Indicators. The abolition of
BVPIs will see the disappearance of the indicator on empty homes, BVPI 64. We criticised
the omission of any mention of empty homes from the new NI definitions, and highlighted the
danger that this could encourage hard-pressed local authorities to reduce or even cease their
work to tackle the scandal of empty homes. We also drew attention to the contrast between
such an outcome and the emphasis in recent Government statements - the Pre-Budget
Report/Comprehensive Spending Review, the Housing Green Paper and the Housing and
Planning Delivery Grant consultation - on the importance of action on empty homes.
Specifically, we argued for the Technical Definition of NI 154 on the supply of housing to be
amended to include properties empty for more than six months brought back into occupation.
There are close connections between this and the consultation on Housing and Planning
Delivery Grant (see separate piece in this bulletin).

Contact Henry Oliver, Policy Advisor:

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Tel.: 020 7022 1869
E-mail: henry.oliver@emptyhomes.com

Public suppor t for

Halifax call for action
on empty homes
Halifax Press Release

Two thirds of people believe the government needs to do more to combat the problem
of empty homes

Halifax recently revealed the true extent of the problem of empty homes in the UK and
announced that one in four people have lived on the same street as an empty home. Reduced
property value (22%) and enjoyment of the street (22%), as well as the number of potential
buyers (25%), are just a few of the negative impacts cited by affected homeowners.

In response to the findings, Halifax called for further action on empty homes. The largest
mortgage lender can now reveal the public support behind its call for action.

Public firmly behind Halifax call to action

Two thirds of people believe the government needs to do more. There is a strong feeling
amongst the public (64% of respondents) that the government needs to do more to combat
the issue of empty homes.

A quarter (25%) believe that existing tax benefits should only apply if the owner makes
the property their primary residence OR sells the property within 12 months. Halifax
called for VAT and Council tax benefits to apply for 12 months for those people who took on
an empty home and either made it their primary residence or sold it within this time. This is to
encourage houses to be re-introduced into the housing stock. Less than one in ten believe the
discounts should apply regardless of the owner's plans for the property as they currently do.

The majority of people (69%) believe the council tax discount should be up to 50%.
Local authorities currently adopt various approaches to council tax reductions for empty

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homes. Halifax called for a unified approach of a discount of up to 50% to apply for 12 months
only. The public supports this call.

Halifax call for further action against empty houses…….Halifax emphasises its call to
action to the government to encourage and reward the renovation of empty houses.
1. Halifax calls on the government to extend the reduced 5% rate of VAT for
restoring an empty home to all properties vacant for more than 6 months, not just
properties vacant for more than 2 years. This will provide a more level playing field
between individuals and local authorities. Typically, local authorities do not pay VAT on
renovation activities.

2. Local authorities adopt various approaches to council tax reductions for empty homes.
Halifax calls for a unified approach. Buyers of empty homes will receive up to a
50% discount for a maximum 12 month period, up to six months of which can be
after renovations are complete. This will encourage people who take on an empty
home to re-introduce them into the housing stock within a 12 month period.

Halifax proposes that the above discounts will only apply if the owner makes the property their
primary residency, finds a lodger, OR sells the property within a 12 month period.

Jaedon Green, head of mortgage sales at Halifax, commented:

"It's great to see that the public is behind our campaign to bring empty homes back into the
housing stock. Halifax calls on the government to extend existing VAT and Council tax
discounts to encourage the renovation of empty houses, thus making them homes".

EDITORS' NOTES

 For more information on Halifax's research into empty homes contact Carol Wright on
01422 333416 or CAROLWRIGHT@HALIFAX.CO.UK

 Further Halifax research on empty homes can be found on its website –

WWW.HBOSPLC.COM

 * Research undertaken by GfK NOP on behalf of Halifax. A representative sample of 959

adults were interviewed by telephone, during the month of November 2007.

Definition of an empty home

An empty home is classified as a dwelling, which has been vacant for more than six months
either because it is between occupants, undergoing modernisation, in disrepair or awaiting
demolition.

A vacant public dwelling is classified as one which is empty for any length of time. Data on
publicly owned dwellings which have been vacant more than six months is not available.
Data on empty homes in England has been sourced from the "Housing and Investment
Programme: Housing Strategy Statistical Appendix 2006" by the Department for Communities
and Local Government. The number of English empty homes is measured as at April 2006.

VAT on Empty Homes

• 17.5% VAT is payable for renovating an empty home vacant for less than 2 years.
• 5% VAT is payable for renovating an empty home vacant for more than 2 years.
• No VAT is payable on renovation of a property vacant more than 10 years, which is
renovated and then sold.

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• 5% VAT is payable for restoring and subdividing an empty home vacant for less than
10 years.

An extension of the VAT discount for renovating empty homes vacant for more than 2 years to
more than 3 years was announcement in the 2007 pre-budget report.

Empty Property News

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

EMPTY SHOP 'TAX' WILL HELP TO REVIVE TOWNS - 7th January 2007
South Devon Herald Express - Torquay,England,UK
The Government ended its empty property relief tax system in a bid to drive down rent and
encourage business growth. In cities like Manchester, ...

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

New VAT rules to help renovators restore vacant properties

CityWire.co.uk - London,England,UK
New rules for VAT on property renovations will encourage owners and developers to get on
with restoring empty properties rather than leaving them to rot. ...

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

Homes sell-off to raise repair cash - 19th December 2007

Islington Gazette - London,England,UK
This included scaling down some refurbishment plans and selling up to 500 empty homes.
Residents have since been consulted and last Wednesday's meeting was ...

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

For more latest news please visit us:

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

E ve n t s

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Event: Tower Hamlets Landlord Forum

Date: 30th January 2008

For more details please contact Jamie Jackson:

Jamie Jackson on 020 7364 3558

Event: Low Carbon Social Housing Conference - Physical, Economic and Social
Revival of Local Communities
Date: 21st January 2008

Hear the latest policy guidance from CLG including the Code for Sustainable Homes and its
role in promoting long term sustainable development

Learn from examples of using new technology in existing housing stock and assessing
the costs and benefits of retrofitting

Hear the latest from the CLG Select Committee Enquiry into climate change and existing
housing stock

For more details please call: George Krousti on 0207 808 5315

* * * * * * * * * * * * *
For more info please look at our website:
http://www.emptyhomes.com/aboutus/events.html

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