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

2 INTRODUCTION

The policy context

2.1 In its 2007 consultation paper Firm Foundations ² , the Scottish Government set an ambitious agenda for boosting overall housing supply, widening the choice of housing for those on lower incomes, promoting sustainable mixed communities and ensuring better value for public expenditure. While the public and voluntary housing sectors would have the main responsibility to supply new affordable housing, the Private Rented Sector ( PRS) was seen as having a valuable contribution to play as:

" a modern, vibrant private rented sector, able to meet housing need through the provision of good quality accommodation." (p.27) ³

2.2 The PRS is already an important source of supply for groups such as young professionals, students and migrant workers as well as an essential haven for some disadvantaged and vulnerable groups. However, Firm Foundations envisaged the PRS playing a greater role in meeting housing aspirations and needs. In particular, a greater contribution could be made as a partner, helping local authorities with their homelessness commitments and responsibility to meet local housing needs.

2.3 The consultation document signaled that a review of the PRS would be carried out. It would have several strands: a stock-taking exercise on views by landlords and tenants on a range of issues; a study of how local authorities could engage more effectively and strategically with the PRS; and a study of how supply options could be boosted that could, in particular, help homeless and low-income households. In the latter context, the reuse of existing empty homes (in addition to new privately developed rental supply entering the market) would be explored further in terms of developing a better understanding of why houses were lying empty and how to promote greater use of schemes which offered incentives to bring empty properties in disrepair back into use to meet a range of housing needs.

2.4 A wide range of organisations responded to the consultation on Firm Foundations on how best to tackle the problem of empty private homes. A range of potential solutions were suggested. These could be summarised in terms of financial incentives, marketing and disposal, rural area issues, financial penalties, compulsory powers, strategy and practice ⁴ .

Aims and objectives

This research addressed the part of the PRS review concerned with boosting supply options. The aim of the research was to gain an understanding of the range of initiatives currently underway in Scotland and the wider UK that local authorities, the Scottish Government and/or other agencies could take forward to increase the reuse of empty properties ⁵ , particularly, but not exclusively, to house homeless or low-income households. The objectives were to:

• Outline existing empty property initiatives and consider their effectiveness and any resultant resource issues.
• Gather views from local authorities and others on the types and numbers of empty private homes, plans for reuse, effectiveness and constraints on initiatives and whether more formal structures and legislation may be needed.
• Make recommendations, highlighting possible benefits and disadvantages, of initiatives that local authorities, other agencies and the Scottish Government, could consider taking forward to increase, cost effectively, the reuse of empty properties.

2.6 It was outwith the scope of the research to examine the role of Housing Association Grant ( HAG) in bringing empty homes into use, by funding purchase and improvement by an RSL for long-term letting. A proportion of the HAG programme has been used each year for rehabilitation of housing or other properties - some of which will have been vacant beforehand.

The Methodology

2.7 A two-stage methodology was adopted. Stage 1 was a scoping exercise to produce an initial list of possible case study initiatives from local authorities and other organisations that could be refined for detailed interviews and analysis in stage 2. The fieldwork and information-gathering for both stages was carried out from June to August 2008.

2.8 Stage 1 covered:

• A desktop review of the literature on empty properties/homes.
• Collation of documentation on English agencies and intervention mechanisms ( e.g. the Empty Homes Agency ( EHA) and Empty Dwelling Management Orders ( EDMOs).
• Development, implementation and analysis of an on-line screening survey of all 32 Scottish local authorities. This survey covered a range of issues, both factual and attitudinal. Survey returns were obtained from 27 local authorities.
• Selection of all case study initiatives for stage 2.
• A review of wider issues ( e.g. Council Tax discount, VAT, statistical data) and a financial, funding and housing market appraisal.
• Interviews with key players: Scottish Association of Landlords ( SAL), Scottish Rural Property and Business Association ( SRPBA) and other large landowners, public and private, e.g. the Crown Estate; the Defence Housing Executive and the Forestry Commission.

2.9 Stage 2, the primary research stage, required semi-structured telephone interviews to be carried out of the final list of case studies across the UK. The case studies selected included a variety of initiatives in different housing and rental markets across urban and rural areas, each with potential relevance for Scotland. These included:

• English local authorities who demonstrated a variety of attitudes to the use of EDMOs and other formal powers.
• Local authorities reflecting a range of inter-authority and inter-agency partnership working.
• Local authority structures that provided support and expertise in a specialist, complex area.
• National support structures offering advice and guidance to local authorities.
• Alternative, voluntary sector or other, non-local authority approaches.

2.10 Annex 1 presents the final list of case study organisations, with a short profile and contact details.

2.11 In total, 23 local authorities and other organisations across the UK were interviewed and written-up as case studies, the accuracy of which was verified with the interviewees as far as was possible. The majority of case studies came from England. Discussion topics covered: local housing and market conditions; the general approach to empty private homes work; strategies and partnerships; organisational arrangements; outcomes and lessons; use of external support, and legislation (use of EDMOs and CPOs). However, due to the diversity of the authorities across the UK, and types of initiatives selected, the choice of discussion topics varied by case study. Annex 2 presents a selection of ten case studies that reflect the variety of strategic approaches, partnerships and initiatives developed.

2.12 The majority of these case studies are referred to in this report; however three - the Affordable Housing Company, Camelot and Giroscope - were investigated and found to have no particular relevance to the Scottish Housing Market and are not commented upon further. However, information about them can be found at Annex 1.

2.13 The issue of bringing second homes into permanent occupation was also investigated and no solutions found. There is consequently no further discussion of this issue in the remainder of the report.

2.14 A practitioners' workshop was organised after the initial analysis work. Of all the organisations involved with the research, 15 attended to discuss the interim results. Their feedback confirmed the broad findings at that point and helped refine and finalise the report. Annex 3 reports the workshop outcomes.

The Analytical Framework

2.15 From a review of the case study initiative material collected, particularly from England, a recurring feature of the initial analysis of the data was that most of the empty private homes initiatives were not implemented in isolation. The more active or progressive a local authority was in its approach to empty homes work, the more varied the initiatives it would undertake and the more likely these were to be integrated within an overall strategic framework that provided the rationale for their choice.

2.16 This report has taken this key 'learning outcome' and presented its analysis, conclusions and recommendations based on three major themes that were judged to under-pin an effective approach to bring empty private homes back into use, namely:

• A strategic development framework and its key elements.
• The dual approach of support backed up by enforcement, and
• Enabling tools and implementation processes to deliver particular initiatives within a strategic context.

The Report Structure

2.17 The remainder of the report is set out as follows:

• Chapter 3 provides an overview of the current empty private homes situation in Scotland.
• Chapter 4 presents the strategy development framework for taking forward empty private homes work in Scotland.
• Chapter 5 examines the different objectives, priorities and targets that can influence empty homes strategic planning.
• Chapter 6 considers the issues surrounding data gathering, the role of Council Tax ( CT) data and other methods of collecting information of empty homes.
• Chapter 7 considers local authority organisational arrangements, partnership arrangements and support models.
• Chapter 8 presents the dual approach of support to owners reinforced by a willingness to employ enforcement powers.
• Chapter 9 sets out the financial enabling incentives and powers available for empty homes work.
• The conclusions and recommendations in Chapter 10 draw out the learning from the research for increasing available PRS provision through the reuse of empty homes in Scotland, including the actions that the Scottish Government and Scottish local authorities can take to promote more effective reuse of empty private homes to meet a range of housing needs.
• Annexes conclude the report, presenting more detailed data on the case studies, the survey results and the use of State Aid.