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

1 EXECUTIVE SUMMARY

Introduction

1.1 The Scottish Government consultation paper Firm Foundations ¹ saw a valuable role for the Private Rented Sector ( PRS) as an additional source of housing supply to help meet the housing needs of a range of households in urban and rural areas, including those on low incomes, immigrant workers, young professionals and students. Increased supply was to be achieved partly through new private rented provision and partly by action to bring empty private homes back into use. The underlying theme was the wish for the PRS to be a partner with local authorities and the Scottish Government, expanding the options available to meet a range of housing needs. However, it would be for each local authority to decide whether or not to pursue work on bringing empty private homes into use and set local housing strategies ( LHS) accordingly.

The research design ( Chapter 2)

1.2 The aim of the research was to identify a range of initiatives, including their effectiveness and resource implications, which could usefully illustrate different ways that empty private homes could be brought back into use in urban and rural Scotland.

1.3 The methodology involved an initial scoping exercise of the literature on empty homes, telephone interviews with key player organisations and an on-line survey of Scottish local authorities to identify their activity in relation to bringing empty private homes back into use. The second stage was a telephone survey of 23 case studies of empty homes initiatives by local authorities and other organisations across the United Kingdom. The majority of case studies were of English local authorities as they were significantly more advanced in their work on empty homes compared to Scottish local authorities. The analysis of these approaches largely shaped the research recommendations, modified and developed as appropriate, for the Scottish policy and legislative context.

Key findings

1.4 Context ( Chapter 3): Accurate information on empty private homes is difficult to obtain, which makes it difficult to estimate accurately the number of useable empty private homes in Scotland. Private homes have become empty for a variety of reasons, often due to the death or removal of the occupant or owner. For owners, an unwillingness to become a landlord has been identified as a significant factor in homes remaining empty. Disrepair has been more of a barrier to upgrading than a reason for homes becoming vacant. Most owners of empty homes appear to be individuals and the number of empty homes owned by professional landlords appears to be low.

1.5 Since the end of the Empty Homes Initiative in 2001-02, empty homes activity by Scottish local authorities has markedly declined. In 2008, most Scottish local authorities viewed empty private homes as a minor problem; only a few considered them a significant issue. While it may be that much of the historic problem of empty homes has been resolved, with a few exceptions local authorities have not carried out any recent analysis of the extent and nature of empty homes nor did they have staff with responsibilities for empty homes. Data collection has been limited and at times constrained by data protection rules. While nearly three-quarters of local authorities have addressed empty private homes in their Local Housing Strategies ( LHSs), this appears to be brief and aspirational in content rather than detailed and substantial.

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

1.7 In England, there has been much greater empty private homes activity by local authorities than in Scotland. This has been due to a combination of factors: the scale of the problem is greater; central government guidance on Empty Homes Strategy production; empty homes performance-indicator reporting obligations for local authorities; the presence of national support agencies and dedicated enforcement powers. A striking contrast between the situation in Scotland and England is the much greater commitment by English local authorities to information-gathering and strategic thinking about empty private homes.

1.8 A strategic approach ( Chapter 4): The research found that effective action on empty private homes requires a strategic approach not piece-meal initiative-taking. Initiatives need to be embedded in a framework of objectives, policies, data, resources and action plans, and integrated within a wider assessment of housing need and supply. Where a local authority has decided to take action on empty private homes in its area, its proposals should be set out in its LHS and reflected where appropriate in other policies and investment plans.

1.9 Objectives and priorities ( Chapter 5): Policies on area regeneration, town centre renewal, rural housing supply and sustainability can engage with empty homes as part of wider objectives but not necessarily in connection with meeting housing needs. Such policies should be reviewed by local authorities who have made a commitment to bringing empty homes into use to see whether empty homes initiatives that contribute to meet housing needs could be incorporated.

1.10 The implementation of the Housing (Scotland) Act 2006 (the 2006 Act) is a major priority for local authorities. Policies to address Below Tolerable Standard housing and Housing Regeneration Areas, to draw up a Scheme of Assistance and prioritise resources should also aim to incorporate empty private homes issues where action on empty homes has been agreed.

1.11 Data Collection ( Chapter 6): The Council Tax Register ( CTR) is the principal and readily available data source on location and numbers of empty homes but in terms of empty private homes, it has limitations in its accuracy, its lack of a tenure marker and in data protection rules. To supplement the CTR, local authorities need to consider other sources of data - area surveys, publicity campaigns and joint work with landlords and land-owner organisations. Additionally, liaison across local authority services may help identify any relevant empty homes data held by various services.

1.12 A difficulty shared with many other local authority services is the complexity and labour-intensiveness of establishing location, tenure and ownership information about privately-owned dwellings from a variety of sources, each designed for a very specific purpose.

1.13 Organisation and support ( Chapter 7): Only a small number of Scottish local authorities have any officers with responsibilities for empty homes and then only as part of other duties. For those local authorities who decide to take forward empty private homes work, the delivery of policies, data-collection and action plans will require consideration of a lead service and lead team or officer(s) with appropriate skills, under-pinned by inter-service, co-operative working across Housing, Environmental Health, Finance, Legal and other relevant services .

1.14 From the case studies, the types of officer skills required for empty homes work were: "hard" information technology skills, "soft" people management skills and legislative interpretation skills.

1.15 The research found that the complex and specialist nature of empty private homes work was often responded to by collaborative working across local authorities and sometimes with other organisations such as Registered Social Landlords ( RSLs). This proved a common 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 to a shared view of how work on empty private homes could be advanced in support of meeting a range of housing needs. Benefits could include: cost-sharing; service level agreements between partners; joint commissioning of consultants; data collection; joint publicity campaigns; mutual learning and problem-solving.

1.16 English local authorities also benefited from support at a national level from both an Empty Homes Agency and an organisation of empty homes practitioners. In Wales, an empty homes project has recently been established. For those Scottish local authorities who decide to embark on (or have started) empty homes work, there would be a benefit from some form of external support. Rather than a national agency, a more appropriate and effective support could be considered by the Scottish Government appointing a co-ordinator or facilitator (one or two posts) to help individual local authorities and regional groupings.

1.17 The dual approach - support and enforcement ( Chapter 8): A recurring theme from the case studies was that success in bringing empty private homes into use depended on a combination of first offering a range of support to owners but having available (and making owners aware of) enforcement powers that could and would be used, should voluntary initiatives fail. Support could take various forms including information, advice, loan, grant, officer skills and brokering a link between the owner and a willing buyer or managing agent.

1.18 Scottish local authorities have no specific power to take over the management of an empty home. English local authorities have the Empty Dwelling Management Order ( EDMO) which, subject to approval by an external tribunal, allows the local authority to take management control and then let the home for seven years at a market rent. The research found that it was a complex, time-intensive and expensive power to employ and, at the present time, is not considered necessary for Scotland to adopt, even if modified. Scottish local authorities should pursue an active policy of support to owners of empty homes using the Scheme of Assistance and other means, combined with a determination to make full use of their current enforcement powers in the Housing (Scotland) Act 2006 and other relevant planning, environmental health and building legislation powers when needed .

1.19 English local authorities also have the power to enforce the sale of a property i.e. empty home, to recover a debt that has been incurred ( e.g. for carrying out repairs or boarding up a derelict house). It has been used as an alternative to an EDMO by a number of authorities.

1.20 Enabling powers ( Chapter 9): Lead Tenancies and Rural Empty Property Grants are well-targeted at producing suitably refurbished housing; conditional on the property being made available for affordable rent, and at low-cost compared with many English forms of financial support. However, they have financial constraints and rather complex procedures requiring considerable negotiation with owners. Over the years they have had a relatively small impact on bringing empty private homes into use. Greater flexibility in their application is desirable and a case can be made for the Scottish Government to consider establishing local rather than national grant levels.

1.21 Tax incentives could also play a part in encouraging owners of empty homes to bring them back into use but better promotion of the benefits (savings) that could arise would be needed. The reduction of VAT to 5% on repairs to houses empty for over two years could be actively publicised by local authorities.

1.22 Local authorities have powers to reduce the discount on Council Tax offered to owners of empty properties and to use the funds raised for a range of local housing purposes, including dealing with empty houses. However, this reduction in discount is often regarded by owners as a stick rather than carrot and local authorities should not reduce the discount so far that there is no incentive for owners to report their homes as empty or decide to seek the discount for single person occupancy instead.

1.23 The evidence points to disrepair being more likely a result of homes lying empty than of homes becoming empty in the first place. However, disrepair is one of the major barriers in returning empty homes to use. With a view to preventing homes from falling into disrepair, authorities should actively engage with owners of empty properties at the point where application for Council Tax discount is made, to assist them to get their property reoccupied as early as possible, with opportunities made available for them to consider the property being re-used for those in housing need.