Housing Forum for London 22 2 06

Empty Homes in London – a paper from the Housing Corporation

Background
The Housing Forum for London is due to discuss empty homes at its meeting
on 22 2 06 following a request from the Private Sector sub-committee. This
paper is to advise the Forum of the Housing Corporation’s (HC) approach to
empty homes both in the Housing Association (HA) sector and in working with
Local Authorities (LA’s), Housing associations and the Empty Homes agency
(EHA) in reducing the number of long-term empty homes in the private sector.

Current situation

 90,000 vacant dwellings in London, 82% in the private sector

 34,000 have been empty for over 6 months
 2% of LA dwellings are vacant
 1.8% HA stock is vacant
 3.2% of stock in the private sector is vacant

What are the drivers behind any strategic considerations?

 The London Plan policy 3A.3. Efficient use of stock.

This says Boroughs should promote the efficient use of the existing
stock by reducing the number of vacant, unfit and unsatisfactory
dwellings. They should produce and implement comprehensive
strategies including targets for bringing properties back into use.
These strategies should be monitored on an annual basis and be
subject to regular review.

 The London housing strategy has a target of total voids being 2.5% of
the housing stock by 2016. The target for the private sector is 1% of
stock.

 The HC Corporate Plan says the HC will work with LA’s to take
advantage of their new powers, such as those offered by Empty
Dwelling Management Orders (EDMO), to tackle long-term private
empty homes, allowing them to be brought back into use.
What is the HC doing at the moment?

 Direct investment. Based on the funding priorities set out as part of

the London Housing Strategy, we aim to target £15m of Temporary
Social Grant from the affordable housing programme for 2006 -08
primarily at bringing empty homes back into use. Our priority will be
wherever possible, empty homes and, in particular, homes that have
been empty for more than 6 months as well as wherever possible,
prioritising schemes which offer longer lease lengths. We are also
working with the Government Office for London on assessing local
authority proposals for dealing with empty homes.

 Regulation of HA’s. We require HA’s to actively manage their property

portfolio and to take action to deal with properties which are, or could
become, long term voids. Options for action could include: the
organisations funding works from their own resources; seeking grant
funding for the works; or for deconversions or extensions to provide
larger homes. Clearly, options in terms of funding available and how it
is targeted is based on priorities set out in the London Housing
Strategy.

Future Directions

 In discussions with LA’s, the impression is that the most useful way
HA’s can help in bringing empty properties back into use is to carry out
a form of purchase and repair programme. However, this assumes
there is a volume of properties available, all with willing sellers and with
a programme that represents value for money. The fact the properties
are long term empties would indicate there is not a willingness to sell
and so the option left is to pursue a CPO. It would be more effective
therefore to follow the investment route mentioned above – to seek
longer term leases on properties with HC grant covering repairs – with
LA’s having a clearly defined strategy/route they are prepared to follow
to bring the property back into use. Another area could be investment
directed towards bringing unused space back into use such as
commercial to residential and unused storage space above shops.
Again, all of these options are contingent on priorities for targeting
available funding set out in the Strategy.

 The Empty Dwelling Management Order allows the local housing

authority (LHA) to step into the shoes of owners of unoccupied
dwellings and to secure the occupation and management of privately
owned houses and flats. The LHA can chose to use an appropriate
managing agent to do this for it and this could be a role for a HA.
However, there is a concern in that, under EDMO’s, any expenditure
on the property cannot be recovered via a land charge. Any money
spent on it can only be recouped through rental income. The
implication of this is it may not be possible to use EDMO’s on those
 properties that have been empty the longest and need substantial
capital works before they can be let because the figures may not stack
up. A further concern is the level of rents that would be charged for
these properties and how affordable these would be. Should EDMO’s
be used to enable properties to be used for temporary accommodation,
there is a danger the occupants could be affected by the issue of HB
dependency/disincentive to seek employment as is experienced in the
PSL sector. As an alternative, such housing could possibly be
considered for Key worker accommodation at intermediate rents
subject to such a route being financially viable.

 In order to maximise the expertise which can be brought to bear on this

area, we would encourage LAs to work with HA’s as development
partners and possibly management partners on a sub regional basis.
This should enable programmes to be built up, giving procurement
efficiencies, extending the options that can be made available to
owners and enable the sharing of expertise and good practice. (Both
north and west sub regions are starting to work on this basis).

LONDON REGIONAL HOUSING POT 2006-08:

SUB-REGIONAL TARGETED FUNDING RECOMMENDATIONS
EMPTY PROPERTIES

SUB-REGION LEAD RHP FUNDING OUTPUTS

AUTHORITY 2006/7 2007/8 TOTAL
£k £k £k

EAST Newham 1,685 1,690 3,375 315

NORTH Barnet 1,690 1,685 3,375 310
SOUTH EAST Southwark 1,125 1,125 2,250 140
SOUTH WEST Wandsworth 1,500 1,500 3,000 246
WEST Hammersmith 1,500 1,500 3,000 372

TOTAL 7,500 7,500 15,000 1,383