Tuesday, July 31, 2007

Britain’s Bad Housing

If you missed it you can see it here Britain’s Bad Housing on Channel 4’s Dispatches programme last night painted a rather squalid picture of the state of the country’s housing market. Andrew Gilligan. Yes him! presented a picture of a market that was scrabbling around to wring the last few drops of profit out of the housing boom before it petered out.

“Buy-to-Leave” has become a metaphor for all that it is bad about the housing market at the moment. Greedy speculators apparently buying properties and leaving them empty to sell at a moment of their choosing. It has always seemed a little exaggerated to me. Surely a really greedy speculator would want the rental income as well?
Gilligan laid the blame not on the speculators but the builders. In Salford Quays a notorious “buy to leave” blackspot , flats were empty because too many high value flats had been built. The builders’ intention was to sell to the speculator market not to consider the housing needs of the area. Consequently the new flats were too small and too expensive for Salford’s population. Naive speculators who hadn’t researched the local rental market or had hoped to sell them on quickly found that they had been sold a pup. This sounds a more plausible explanation than deliberately leaving them empty. Whatever the reasons there can be little doubt that Gilligan is right, properties are being left empty because they are being built as tradable commodities and not liveable homes. No doubt many “buy-to –leave” landlords are sitting tight waiting for an upturn in the market to give them a painless way out. Unfortunately for them all the signs are the market is about to head in the opposite direction.

Monday, July 23, 2007

Housing Green Paper - New Homes From Empty Property

Yvette Cooper launched the Housing Green Paper a couple of hours ago and I'm pleased to report that the empty homes issue is well covered. In fact chapter 4 is devoted to it almost entirely. There’s some good stuff in here, but some important omissions too.

Firstly the good stuff; Government is acknowledging the problem. The occupation rates of housing are important as the numbers of homes. Building lots of new homes won’t solve housing undersupply problems if large proportions of them are left empty. The government makes some proposals here about resolving it. It centres around enabling local authorities to use EDMOs more effectively The heavy hint here is that government looks like it might be rethinking the housing planning and delivery grant mechanism to include a financial reward for local authorities to get empty homes back into use. The government consulted on revising the housing planning and delivery grant last year. It proposed to offer grants to local authorities for approving planning applications to build more homes. At the moment local authorities are rewarded only for their efficiency of processing planning applications not the wisdom of their decisions. You might argue that giving a financial reward for judging an application in one way and not the other rather takes away local authority’s planning impartiality, but we’ll leave that argument for others to make for now. My real problem was that the government’s proposals would have rewarded local authorities for allowing new homes to be built, but would offer no reward for work they did to get empty homes back into use. Skewing thinking and action towards new build as the only way of creating new homes. Thankfully sense seems to be prevailing and unless I’m reading too much into it, there is a suggestion that we could get a mechanism that rewards all ways of creating new housing supply and thereby providing some much needed funding to help local authorities to get on with the job of turning empty property into new homes.

There are however omissions. To give the government credit this document was put together in record time with very little warning from our new PM that he wanted it. But omissions there are; whatever view you take about the effectiveness of local authorities, I don’t think anybody believes that they are capable of sorting the empty homes problem out single-handed. Empty homes are a housing market failure and any real solution must include incentives to make the housing market work more effectively. Here are two suggestions I would like to see:

Take away the incentive for speculators to buy to leave by abolishing the council tax discount for empty homes and giving local authorities the flexibility to double the council tax on long-term empty homes.

Harmonise the VAT on refurbishing empty homes and building new homes. Making it more affordable and cost effective to renovate derelict homes. Currently new homes are zero rated for VAT, refurbishing most empty homes is rated at 17.5% VAT.
These ideas will certainly be the Empty Homes Agency’s response. But we’ve now got the summer to have a proper debate about what we need.

Monday, July 16, 2007

Emerging Consensus Over Empty Homes

Over the weekend two more correspondents Charles Clover in The Telegraph and Anne Ashworth in the Times added their voices to calls for the government to address empty homes as part of the push for 3 million new homes.

Friday, July 13, 2007

Telegraph Speaks out on Empty Homes

My thanks to Anne Cuthbertson at the Telegraph for this excellent item. The Telegraph is an intelligent paper, but on the basis of these comments it does seem to attract some odd readers.

Size Doesn't Matter

A sad but irritating story in the Liverpool Daily Post this morning. Am I just humourless or are the continuous little digs at Hazel Blears size annoying? We should surely judge ministers on their achievements. Gordon Brown has just given the new Communities secretary a huge task; to solve the housing crisis. if she achieves it she will be a political star. Many have tried before and failed but with the priority given to housing by the new Prime Minister we should be under no illusion that this time they intend to succeed. One item I would like to add to her in-tray is empty homes. Surely England’s 300,000 long term empty homes should be a priority source of some of the 3 million new homes the government rightly says we need.

The Empty Homes Agency is today calling for the government to

Take away the incentive for speculators to buy to leave by abolishing the council tax discount for empty homes and giving local authorities the flexibility to double the council tax on long-term empty homes.

Harmonise the VAT on refurbishing empty homes and building new homes. Making it more affordable and cost effective to renovate derelict homes. Currently new homes are zero rated for VAT, refurbishing most empty homes is rated at 17.5% VAT.

Wednesday, July 04, 2007

Happy Birthday EDMOs

It was a year ago today that local authorities gained the power to use Empty Dwelling Management Orders. The Daily Express claimed that there would be a national purge on empty homes with thousands seized under the new powers. It claimed that the government had built up a war chest that would fund the programme. This, the Express claimed was the single worst act by a British government, TV presenter Kevin McLeod said that with the new powers the UK had effectively become a communist state. The Daily Mail claimed that it was a sinister plot to snatch homes off the dead. All I'm afraid to say a bit over-dramatic. There have been three interim EDMOs made, and no final EDMOs. No properties have been seized. And I don't know what you think but it doesn't feel much like a communist state to me.

On the other hand many empty home owners have heard about the new powers and a good number have decided that perhaps they had better do something with their property before the council gets their hands on it. Depending on your view that may or may not be a good thing, but it's far cry from the hysterical vision that much of the tabloid press painted a year ago today.

Tuesday, July 03, 2007

Unsuitable for Children

Apparently this blog is unsuitable for children. This http://mingle2.com/blog-rating has given "unlocking the potential" a PG certificate. The reason given is the frequency of the words "death" "pain", "murder" and "sexy" I can't remember writing any of those especially sexy! What a risque subject empty homes has turned out to be.