Review of the Private Rented Sector: Volume 4: Bringing Private Sector empty houses into use

A review of initiatives to address the problem of empty houses drawn from case studies across the UK.


10.1 This chapter brings together the main conclusions of the research and presents a series of recommendations designed to highlight potential benefits of a variety of approaches, structures and mechanisms to return empty private homes into use and increase the supply of housing. The recommendations are aimed primarily at local authorities - urban and rural - and the Scottish Government, though they should be of interest to landlords, their representative organisations and RSLs, amongst others.


10.2 Work on empty private homes is more fully developed in England than in Scotland for a variety of reasons ( e.g. the scale of the problem, strategy, organisation, supporting organisations, funding, powers, and until recently, the presence of an empty homes Best Value Indicator). Consequently, the findings from the research with English local authorities and agencies here shaped much of the thinking about what would, and wouldn't, be appropriate to take forward, modified, as appropriate, to the Scottish housing policy and legislative context.

10.3 A conclusion from the research analysis that underpins a number of the recommendations is that local authorities with a well-informed strategy or policy framework for their work on empty private homes, did not pursue "one-off", discrete initiatives but had an integrated approach where strategy, organisation, co-ordinated support, resources and policies were, in effect, "initiatives" just as much as particular forms of support to owners and enforcement action. Such an approach takes time to construct and for benefits to materialise but it is consistent with the rational planning theme that guides the development of the Local Housing Strategy.

10.4 One important aspect of the analysis of the English initiatives that needs to be borne in mind is that empty homes work has been prosecuted extensively by local authorities and supported by central government but not necessarily always in support of housing need objectives. Empty private homes have been addressed through area or town centre regeneration, in support of rural housing priorities or because particular properties were detrimental to the local amenity or a risk to public safety. In such cases, returning the home into use was the main reason for engagement. The research has sought to evaluate the key lessons from all the case studies in the context of the more specific Scottish focus on empty homes and the range of housing needs that have to be met.

10.5 In Scotland, empty private homes are not seen as a significant issue by many local authorities. The reasons can only be reflected on. The Empty Homes Initiative challenge funding for five years to 2002 possibly dealt with some of the most intractable properties. On the other hand, its demise may have removed the encouragement for local authorities to deal with the issues that remain. Until lately, a rising housing market may have removed much of the incentive for owners to bring empty homes back into use as property values increased regardless of condition. The recent market slow down may well reverse this trend. Finally, a reason that underpins much of the recommendations of this research is that competing policy pressures, lack of strategic importance, a perception that refurbishment of empty homes is not good value for money and a lack of data may have led local authorities to conclude that empty private homes did not merit priority.

Prioritising work on empty private homes

10.6 It has been emphasised several times in the report that it will be up to each local authority to decide if it wants to develop policies to address the reuse of empty private homes. This decision should be predicated on establishing, at least in outline, an evidence-base on empty private homes as the foundation block for strategy implementation. It is quite possible there will be local authorities who will proceed no further if the outcome of preliminary data collection is the conclusion there is a minor or negligible problem that merits no further policy priority.

10.7 Where a positive commitment is made, some degree of priority will have to be accorded to that decision. However, in so doing, it should be noted that other policies such as area regeneration, town centre regeneration, rural housing initiatives and sustainability 44 may also engage with empty homes as part of wider objectives - though not necessarily in connection with meeting housing needs. In that context, an assessment of whether such wider policies could incorporate a commitment to action on empty homes to meet housing needs is desirable.

Recommendation 1

A local authority should establish, at least in outline, an evidence-base on the extent and nature of empty private homes in their area before deciding, after consulting with other local authority departments, on the merits or otherwise of establishing a specific policy to address the reuse of empty homes.

Developing a strategic approach in Scotland ( Chapter 4)

10.8 The new-style LHS will focus on outcomes that set the strategic direction for each local authority and a separate monitoring and evaluation framework will no longer need to be produced. For local authorities who have committed to taking action on empty private homes, the issues to be addressed should feature in their strategic planning, i.e. in the LHS.

10.9 A number of authorities have also developed a Private Sector Housing Strategy. This can provide more scope and depth than is possible in the LHS, to amplify on the analysis, policies and initiatives to address empty homes problems and to link opportunities to reuse empty private homes with the range of local housing needs that have to be met. Also, developing a specific empty homes Action Plan as part of a Private Sector Housing Strategy, or as a separate exercise, could prove a valuable practical tool by setting out clear objectives, policies, tasks, targets, timescales and officer responsibilities that can then be monitored and reviewed.

Recommendation 2

Where a local authority has decided to take action on empty private homes in its area:

  • The Local Housing Strategy should set out the local authority's intentions to increase supply by bringing empty private homes into use.
  • An Action Plan should be developed.
  • Policies and actions in relation to empty homes issues should be incorporated, where appropriate, in the Strategic Housing Investment Plan, the Affordable Housing Policy and the Scheme of Assistance.
  • An assessment should be made of how other policies such as urban regeneration, town centre regeneration or rural housing could contribute to bringing more empty homes into use to meet housing need objectives.

10.10 For local authorities that have identified action on empty homes within their LHS, there are a number of key elements of a strategic approach that should be followed up in a more specific and detailed way. These are to:

  • Draw up an Action Plan that sets out objectives, policies, resources, targets and responsibilities to bring empty private homes back into use.
  • Collect more precise and detailed empty homes data covering numbers, location, condition and the reasons why homes remain empty. Methods to employ include analysis of the Council Tax Register supplemented, as appropriate, by other quantitative and qualitative methods. ( Chapter 6)
  • Establish the organisational requirements to resource the work, i.e. the lead service, designated team or officer, skills and budget. ( Chapter 7)
  • Identify the strategic and implementation partnerships ( i.e. internal co-operation across Services and externally with other local authorities and other organisations) that, if set-up, could reduce costs, pool resources and develop learning, skills and a shared vision. ( Chapter 7)
  • Establish a dual approach by, on the one hand, drawing up the range of available support mechanisms, and, on the other hand, the enforcement policies, procedures and legislative powers that are necessary to have available. ( Chapter 8)

Data Collection issues ( Chapter 6)

10.11 The Council Tax Register ( CTR) is the principal and readily available data source on empty private homes that produces statistical data and is near cost-free. However, it was developed for revenue collection and notably lacks a tenure marker to enable private properties to be distinguished from those of other tenures. Data protection issues were, perhaps unnecessarily, found to be a limiting factor for some local authorities, particularly for locating and identifying individual empty homes that might be brought back into use. In assembling a database, local authorities will generally need to supplement CTR data with that from a variety of other approaches, taking account of resource costs and reliability.

10.12 The research has shown there is no single, straightforward way of identifying empty homes. Most importantly, local authorities should consider external sources of data - surveys, publicity campaigns and joint work with landlords and land-owner organisations. However, a variety of internal data is held by other local authority services that could be useful. Apart from housing sources, other services within the local authority - Building Control, Planning and Environmental Health - may also be able to assist. Other public sector agencies, such as the Police, may be able to identify empty homes. Access by a designated empty homes officer to relevant data held by these services may require access protocols to be established and data protection to be clarified.

Recommendation 3

To gain a realistic estimate of empty private properties, their location and ownership, local authorities should supplement Council Tax Register data analysis with other approaches to data collection that are appropriate to local circumstances. Other sources will include: information held by other services within the authority (if not restricted by data protection rules); area surveys, owners' surveys; Registers of Scotland data; publicity campaigns; postal surveys; web-site hotlines and liaison with landlord organisations and forums.

10.13 Recommendation 3 reflects the current reality for local authorities seeking to assemble good quality data about empty private homes. It also reflects a wider issue concerning the difficulty, complexity and labour-intensiveness of constructing location and ownership information about privately-owned dwellings from a variety of sources, each designed for a different and very specific purpose. There is clearly merit in a comprehensive local private property data-base that assembles all location and ownership information for private dwellings. Such a database could be useful to a wide range of local authority services including planning, environmental health and building control. It is not possible however to estimate what savings might be achieved against the undoubted high cost of establishing such a database.

10.14 Prevention is better than cure. If empty homes can be "picked up" at the point an owner applies for an empty homes discount (where the house has been empty for over six months) speedy reuse could prevent the property falling into further disrepair where it no longer becomes value-for-money to deal with the property. At this point, the local authority should establish the reason for the property becoming vacant, the owner's willingness to return it into use in the future and any assistance that might be required. In particular, an assessment could be made of the owner's willingness to the house being made available through an arrangement with the authority to meet housing need.

Recommendation 4

Where appropriate, local authorities should develop a proactive approach to engaging with owners who apply for empty homes Council Tax discount, with the aim of gaining information about the owner and the possibility of the home being made available in the future to help meet a housing need. Progress on returning the empty home to use should be monitored and contact maintained with the owner until the property is once again inhabited.

Organisation and support ( Chapter 7)

10.15 A commitment by a local authority to establish a strategic approach to empty private homes work, to data collection and to implementing an Action Plan has to be predicated on a commitment to an organisational framework capable of delivering them. For those local authorities who decide to take empty private homes work forward strategically, consideration has to be given to identifying a lead service, its designated team or officer(s) for empty homes work, the appropriate duties of the officer(s), the essential skills required and budget necessary.

10.16 Existing LHS staff will be able to integrate empty homes strategic issues into LHS planning and development - but implementation initiatives will require consideration of a wider range of staffing and skill issues. Local authorities retain a wide range of skilled officers so it is not presumed that all the necessary skills for empty homes work will be available within a housing strategy team or even within a Housing Service, but other services should have professionals with the expertise, knowledge and skill areas that may have to be drawn on. The research found that, although there was a lead service for empty homes work in all the case studies, co-operation across various services of the authority was beneficial, if not essential, for access to information and co-ordinated action where necessary. However, in one case, a consultancy contract provided a consortium of local authorities with necessary expert skills not available in-house.

Recommendation 5

Local authorities who intend to take forward work to bring empty private homes into use should establish the organisational requirements, the key features of which are:

  • Identifying a lead service and a lead team, or officer(s), and ensuring empty homes strategy work is fully integrated within the Local Housing Strategy.
  • Ensuring there are the resources and staff with the skills to deliver the strategic commitments made in the Local Housing Strategy and related Action Plan.
  • Securing that the range of potential skills required for empty homes work are available to assist action: skills in strategic development, information technology, data analysis, inter-personal communications and legislative interpretation being the most significant.
  • Establishing internal co-operative working to take forward cross-service issues including data collection and analysis; publicity; support and enforcement powers.

10.17 Partnership working across local authorities and with other organisations such as RSLs proved a common and productive feature in a number of the English case studies. Partnerships varied from informal forums and joint working protocols to formal consortia. Such partnership approaches could be considered by Scottish local authorities and shaped to local geography, or a shared view of how work on empty private homes could be advanced in support of meeting housing needs. Benefits could include joint publicity campaigns and surveys, sharing of staff and learning from each other. This should be more cost-effective than each authority working alone. Costs could be shared equally or pro rata according to the estimated number of empty private homes or days of work required. Authorities with officers with particular expertise may consider recharging other authorities for the use of their services, or using part-time secondments.

10.18 In larger urban areas with a number of RSLs, a partnership approach between them and the local authority could work very well with the RSLs having the opportunity to develop a specialism and gaining "reward" from overall higher activity levels. (See Plymouth City Council at Annex 1.) Alternatively a sub-regional partnership with a number of smaller local authorities within reasonable travelling distance of each other and a relatively small number of RSLs ( e.g. the Empty Homes Partnership Devon) could prove equally appropriate. The consortium approach, as developed in Kent County Council, might also be applicable for such authorities.

Recommendation 6

Local authorities who plan to take forward work on empty private homes should consider the benefits and costs of developing a partnership approach with other local authorities and local housing associations. Partnership formats to consider vary from informal joint liaison and working arrangements through to formal consortia based on agreed protocols that could allow for joint commissioning of consultants, data collection and publicity campaigns.

10.19 The study of empty homes work in England revealed that although there are various inter-authority empty homes partnerships, authorities also benefit from support at a national level from both an Empty Homes Agency and an organisation of empty homes practitioners. In Wales, the Welsh Assembly Government has established a two year empty homes project with Shelter Cymru. The costs of these initiatives, and the consequent range of support they offer, vary considerably.

10.20 Given the starting point for empty homes work in Scotland is low, local authorities could benefit from some form of external support (additional to any local or regional partnerships). A national agency would appear unnecessarily expensive and over-elaborate a structural approach. Given that not all local authorities will necessarily consider empty private homes a problem or a priority, an appropriate support model could be defined in terms of just one or two specialist officers (co-ordinators), who would provide promotional, set-up and on-going support to those local authorities interested in, or already committed to empty homes work. Engagement with landowners and landlords and other key players in the private sector could also come within the remit. As a national resource, a fixed term project of two or three years, funded by the Scottish Government, would be the most likely way of ensuring a project materialised. (The development of common housing registers was supported in this way by an initial fixed-term secondment from a university). Location of the co-ordinator(s) would have to be carefully considered. Options include within the Scottish Government, a national housing organisation or a practitioners group such as the Scottish Housing Best Value Network.

Recommendation 7

The Scottish Government should consider establishing a national empty homes resource, based on a project of one or possibly two co-ordinators or facilitators to provide support to local authorities and partnership groups and to liaise, where appropriate, with landlord and landowner organisations and other key organisations with interests in the Private Housing Sector.

A dual approach ( Chapter 8)

10.21 It is clear from the experience of English local authorities that effective intervention to bring empty private homes into use (whether for housing need or any other end purpose) depends on a combination of first offering a range of support but then following up with the threat (and ultimate use, if necessary) of various types of enforcement action, should owners be unwilling to co-operate. Such a dual approach is just as appropriate for Scottish local authorities.

10.22 The key lesson is that support is built on three foundations:

  • Developing an understanding of an empty home owner's circumstances and motivation.
  • Providing viable offers of assistance, be that financial, non-financial or both.
  • Being persistent by not "giving up" if the first offer of support is ignored or rejected.

Recommendation 8

Local authorities taking forward work to bring empty homes into use should adopt a dual approach to working with owners of empty homes, based on a combination of offers of support as the first means of engagement, reinforced, if necessary, by the threat of employing the enforcement powers in the Housing (Scotland) Act 2006 and in other relevant planning, environmental health and building legislation. However, enforcement action should be taken as a last resort.

10.23 There are a variety of forms of support that can be made available to owners - from straightforward information and advice through to tangible financial incentives via loans and grant-aid. Publicity campaigns can be used to invite owners to approach the local authority for advice and assistance. Information about the reduced VAT rate on repairs to homes empty for over two years can be publicised. A loan, or possibly grant, could be offered linked to an agreement to rent for a period of years.

10.24 For an owner who is judged not capable of carrying out the work to bring his/her home into use, local authority officers could provide practical skilled assistance. An owner who wants to sell could be guided to a local housing association who may offer to purchase the property. Alternatively, the local authority could ask all those on its private landlord registration database if they wished to submit themselves for consideration as an approved "investor landlord". The list of such approved landlords could then be offered to owners who wished to sell an empty property in this way.

10.25 While recognising that many owners of empty homes are not private landlords, local authorities could use the information on their Private Landlord Registers and also work through local landlord forums to solicit feedback on how "owner friendly" their proposed policies, support mechanisms and publications are in encouraging empty homes into use and encouraging their owners to become private landlords.

10.26 Support mechanisms are to be seen as the bed-rock of working with empty home owners, but as noted, local authorities have to clearly communicate their determination to escalate action against owners who do not co-operate or where property ownership cannot be traced.

10.27 Scottish local authorities have a variety of enforcement powers in the 2006 Act to deal with the poor maintenance, disrepair, damage to amenity or danger caused by some empty homes and a power to recover costs of works carried out in default of the owner. A long-established available power is to serve a Compulsory Purchase Order but the research found only one occurrence of its use on empty homes 45 .

10.28 English local authorities, subject to approval by an external tribunal, can use a special power, the Empty Dwelling Management Order, to take over management control and subsequently let an empty private home for seven years - but at a market rent. The research found that it was a complex, time-intensive and expensive power to employ. Expensive refurbishments have been difficult to recoup from rental income leading some local authorities not to use an EDMO where renovation costs are over a specified amount. Its use to date is very limited and in January 2009, action to make it easier to use became part of a campaign in England by some professional housing agencies 46 . Notwithstanding these drawbacks, it was found that the threat of serving an EDMO has made some otherwise intractable owners agree to co-operate with their local authority, especially when combined with the offer of financial help or access to a leasing scheme.

10.29 Scottish local authorities have no power, other than using a Compulsory Purchase Order, to require a privately owned, empty home to be brought into use (for sale or rent). On the issue of whether an EDMO, devised to accord with Scottish requirements, would be desirable, the conclusion from the experience in England is that there is insufficient confidence that a "Scottish EDMO", would efficiently and cost-effectively provide the result it would be designed to achieve. Its drawbacks, particularly that the let must operate at a market rent and therefore inhibit access to households in housing need, have been noted but even if it were procedurally streamlined compared to that of the English EDMO, as a new power it would require primary legislation and have to comply with Human Rights legislation.

10.30 However, on the basis of the status quo in Scotland at least for the foreseeable future ( i.e. local authorities will work within existing legislation) a case can be made for the importance of an approach based on working supportively with owners ( e.g. by making full use of the Scheme of Assistance and any other incentive schemes available such as Rural Empty Property Grants or Lead Tenancies). Allied to that approach must of course be a willingness to use the available enforcement powers.

Recommendation 9

No early action should be taken by the Scottish Government to initiate legislation to introduce a compulsory management power to deal with the problems of empty homes.

Recommendation 10

The Scottish Government should consider providing guidance to local authorities on how, and in what circumstances, the use of compulsory purchase powers could be applied to address the problem of intractable cases of empty homes.

Enabling mechanisms ( Chapter 9)

10.31 The specific grant mechanisms used in Scotland to deal with empty homes - Lead Tenancies and Rural Empty Property Grants ( LTs and REPGs) - are well targeted at producing affordable rented housing; conditional on the property being made available for affordable rent, and at low-cost compared with many of the English mechanisms. However, the low financial levels of support for individual projects ( e.g. the standard 33% grant cap on eligible expenditure for REPGs) and some complexities in procedures mean that the mechanisms are not well used and often require considerable negotiation with owners. They have not, numerically, had a major impact on empty home numbers.

10.32 As local authorities increasingly come to influence how the Affordable Housing Investment Programme will be prioritised, it will be for local authorities to decide if they wish to ask the Scottish Government to give higher priority to funding the reuse of empty homes than the development of new-build provision. While grant levels should be benchmarked against HAG levels, it must be recognised that all applications for HAG are considered on their merits and higher levels of HAG, above national Housing Subsidy Target levels, will be more common in remoter rural areas and may provide a more appropriate local benchmark for empty homes grants. Local authorities may be prepared to make this recommendation where there are difficulties in providing new build housing, e.g. where RSLs sometimes cannot afford to develop or manage very small numbers of houses in remoter areas and issues of lack of suitable building land, environmental sustainability and building conservation dictate. In these cases older houses with a potentially shorter rental life-cycle may be considered to be better value-for-money. In terms of grant levels, a degree of consistency between LTs and REPGs should be considered.

Recommendation 11

The Scottish Government should consider establishing local rather than national grant levels and these should be consistent between grant mechanisms ( i.e., Lead Tenancy or Rural Empty Property Grant). The Scottish Government should consider reviewing the level of grant to ensure it is still appropriate ( i.e., attractive to the applicant and providing value for money for the public purse) and this may mean taking account of housing costs in the local housing market area, particularly in remoter rural areas. Funding levels should also consider the environmental sustainability benefits of re-using empty homes.

10.33 A number of English local authorities offer loans to owners of empty homes with the repayments provided by the rental stream, often through a leasing scheme. This is perhaps a model which has a good fit with the Scheme of Assistance being developed under the 2006 Act. However, another incentive to bring empty homes back into use - the reduction of VAT on repairs to 5% for homes that have been empty for over 2 years - does not discriminate as regards the final tenure of the repaired property. To be useful in relation to meeting housing need it would have to be coupled with other forms of assistance, attractive to the owner.

Other issues

Additional sources of funds ( Chapter 9)

10.34 Local authorities could consider developing sources of funding from reduced council tax discount income on empty homes and also from commuted sums for affordable housing provision from planning developments where there is already sufficient new affordable housing provision in an area but a greater need for regeneration.

Technical improvements ( Chapter 9)

10.35 The research found occasions where "technical" barriers either inhibited or frustrated the efforts of empty home owners to repair or improve empty homes. Two improvements that the SG could consider are in better promotion of REPG by making it less complex and risk reduction in LTs where owners must pay back the grant if the tenancy is ended by the RSL.

Recommendation 12

The Scottish Government should consider:

  • Better promotion of Rural Empty Property Grant to empty home owners, by making it less complex and making the funding calculation more transparent.
  • Balancing protection for the public purse with the risk created for owners of Lead Tenancies.

Council Tax discount ( Chapter 6)

10.36 To provide both an incentive to continue to register properties as empty on the CT register so that owners can be offered assistance, and as an incentive to bring them back into use as rapidly as possible, the removal of discount should be progressively increased the longer a home remains void.

Recommendation 13

The Scottish Government and local authorities should consider introducing guidance that permits the progressive reduction of Council Tax discounts, so that the longer a home stands empty, the less the discount that is available.

Links to supported lending ( Chapter 9)

10.37 The linking of loans offered under the Scheme of Assistance to a commitment to renting through a recognised scheme should be investigated.

State Aid ( Chapter 9)

10.38 Issues of potential restrictions on state aid support were considered and it was felt that the use of grant aid through established schemes such as Lead Tenancy Schemes ( LTS) and REPGs which had block exemptions was no barrier. In some circumstances it would appear that support under the Scheme of Assistance could also be exempt from restrictions but a local authority would be advised to confirm this (see Annex 6).

Use of non-residential buildings

10.39 The homes-over-the-shops initiative appears to have been limited to individually owned shops. Particularly for larger chain-stores, the whole building may be leased rather than owned so capital investment may be difficult. There may be some scope to negotiate with "multiples" and chains at a national level to encourage them to review their portfolios with a view to providing living accommodation. A national housing association would be in the best position to take forward such an initiative and undertake development using LTs and then arranging for local RSLs to undertake letting and management.

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