Empty Homes Network

National Empty Homes Conference,
May 29th 2012, Birmingham

29 May 2012 10:00
Event Description: 

The Draft Programme for this essential event  has now been published - and we've kept costs even lower than last year, with big discounts for full Members of the Empty Homes Network.  See the attached Booking Form for further details.

We're pleased to announce that Andrew Stunell MP will be speaking and has offered to address questions submitted by our practitioners (you can register your questions here).

Others speakers include representatives from key organisations such as :

  • Homes and Communities Agency
  • Empty Homes
  • self-help-housing.org (Community Grants Programme)

We have practice sessions lined up on

  • councl tax
  • good service of notices
  • EDMOs
  • Empty Homes Strategies

We  expect to see new partnership schemes being presented by

  • GraftonLtd with Dave Stott (tracing agents and enforced sales)
  • Dee Rentals (new leasing options)
  • House Doctor (new options for owners)
  • Paul Palmer and Get Wise Gruoup leasing/sjupportedl housing options)

And of course, we will have our Empty Homes Practitioner of the Year Award

We have booked our conference venue at Maple House, Birmingham.  The venue provider is the same as for our joint London Conference in 2011. You can proceed with confidence that this is indeed  the date of the Empty Homes National Conference.

With budget cuts and ever-higher travel costs, we know that keeping the cost of attending as low as possible will be a big consideration.  The costs of delegate places will be comparable with previous years, as low as £115 for full members of the Empty Homes Network and with special options for small organisations.

You can minimise your travel costs by, for example coming the night before. Travelodge rooms in central Birmingham are currently available for 28th May (ie the night before the Conference) at £33 per night (as at 11th May).  (We have no commercial relationship with Travelodge).

To book your place, simply download the booking form, complete and return to events@ehnetwork.org.uk

Contact details: 

Enquiries can be sent to events@ehnetwork.org.uk

EHA to launch new campaign

Campaigning charity the Empty Homes Agency is gearing up to launch its new campaign to bring down the number of empty homes. The main public launch of the campaign will be during Empty Homes Week, which runs from 1st to 5th December 2014, but emails have already been sent to council Leaders today with a view to getting local authorities to pledge support to the new initiative formally.

Helen Williams, Chief Executive of the EHA, has copied to EHN the email sent to council Leaders, which reads as follows:

We are asking local authorities to sign up to support the Empty Homes Agency campaign to reduce long-term empty homes across England.

The pledge

In doing so, we are asking you to pledge, as a local authority supporter, to:

  • Have an empty homes plan or strategy for your area, with aspirations to reduce the number of long-term empty homes[1].
  • Seek to attract and/or allocate resources in your area to refurbish empty homes or empty spaces above shops for those in housing need. Working in partnership with property owners, housing associations and community organisations to do so.

To show your support, simply email: policy@emptyhomes.com, with the message: “we are a local authority supporter of the Empty Homes Agency campaign to reduce the number of long-term empty homes across England”, and the subject line: “Local authority supporter of the campaign to reduce the number of long-term empty homes”. It would be great if you could email us soon, and by the end of December 2014 at the latest.

As part of our campaign, we will be asking all the Westminster political parties to pledge that, should they form the next government, they will adopt a plan to tackle empty homes within their first year in power, as part of a wider approach to tackling housing need. We believe priority should be given to this work, as bringing empty homes back into use plays an important role in meeting housing needs.

Empty Homes week

We are also encouraging local authorities to publicise their empty homes work, particularly during Empty Homes Week starting the 1st December. Please let us know what you have planned and tell us about the coverage you get by emailing policy@emptyhomes.com. Our aim is to ensure that we secure lots of coverage of the good work being done, up and down the country, to bring empty homes back into use.

Long-term empty homes are those homes that have been empty for six or more months.

 

Houses to Homes gives impetus to Welsh authorities

The Welsh Houses to Homes initiative continues to deliver solid results according to the latest Interim Evaluation report by Sheffield Hallam University, now including data from the first two years of the scheme and collected up to March 2014.

The outcomes and messages are in line with those reported in the previous evaluation, which we reviewed last March in our story Welsh Houses to Homes Initiative latest update, but there are one or two new points starting to emerge that should prompt further analysis in the future.

Providing impetus

Particularly interesting from the practitioner point of view is the extent to which Houses to Homes seems to have been the catalyst for more vigorous empty homes work across the board. From the baseline 2011-12 figure of 1,372  "direct actions" on empty properties returned into use by local authorities across Wales, the number has risen exponentially to 1,809 in 2012-13 and 4,554 in 2013-14.

The percentage of this increase that can be attributed directly to offers of funding from the Houses to Homes pot was relatively low and indeed starting to decline: "financial assistance" represented 7%, 12% and 9% of the total actions, respectively, in the three years. We can reasonably infer that the strategic developments sparked by the initiative, rather then just the money itself, were the vital ingredient.  It is worth quoting the report at length on this:

4.10  Houses into Homes was reported to have raised the profile of empty homes work in its first year of operation and resulted in an increase in corporate commitment to tackling the problem. Benefits continued to accrue during the second year of the scheme, with 15 out of 22 local authority empty homes officers reporting that corporate commitment to tackling empty homes increased in 2013/14 and no officers reporting a decrease in commitment. Various explanations were provided for the continuation of a trend reported in 2012/13, following the launch of Houses into Homes. One regional coordinator referred to a 'cycle of interest' in empty homes, whereby awareness about the problem of empty homes had been raised, in part by the launch and related marketing of the Houses into Homes scheme. This prompted more owners to contact their local authority seeking advice or assistance and more complaints from residents about empty homes in their area. This, in turn, was reported to have prompted local councillors to take more interest in the problem [p35].

Undoubtedly the British government's empty homes funding in England and the New Homes Bonus (which is not incidentally available in Wales) have also given some impetus to empty homes work.  Nevertheless, compared with the Welsh experience, it is hard to resist the view that an opportunity to harness the funding to building local initiatives has been squandered.

Fewer loan applications

It  is surprising, in the context of this increased activity, to discover a decline in the number of applications for loans from 241 in 2012-13 to 173 in 2013-14. This will deserve close scrutiny, the main question being whether it reflects a finite supply of opportunities, one that would always set limits to the number of loans that could be granted and would thus indicate a limit to the size of any pot of funding that should be allocated to such a scheme.  The Kent experience might be drawn into answering this question. 

Key variables

It has now become even more apparent that there are significant differences between different types of scheme, most notably between conversion projects, particularly of commercial premises, and projects involving individual dwellings.  Another significant variable is between projects undertaken by limited companies (ie developers) and individuals.

These differences are commented on in the text and sometimes further explanation or figures are supplied.  But what we need in order to make the optimum use of the lessons that the initiative provides, is more systematic reporting of results at a finer level of granularity, taking relevant distinctions more clearly into account and with less averaging of figures.

Similarly, there is not a great deal of analysis at local authority level: mostly the figures provided are national. But the profile of local authorities differs widely between, say, major cities like Cardiff, the Welsh Valleys with their extensive industrial heritage, and the sparsely populated rural authorities. Where local authority figures are provided, as in the map of applications received, the report does not provide critical information such as the recorded numbers of empties and the (more reliable) figure for the overall number of dwellings in the different authorities.

So we look forward to future reports - or at least the final report - putting us in a better position to establish correlations between different factors, not least of which might be the relative resource devoted to empty homes work in individual local authorities.

Bedtime reading

Regardless of whether more information might be provided, anyone involved professionally or strategically in empty homes work should certainly study this report and its predecessors. They are a goldmine.

Find out more

The evaluation reports and monitoring data associated with 'Houses to Homes' can be retrieved via our Library from here.

Previous Empty Homes Network stories on the House to Homes Initiative can be retrieved by following the Wales tag in our Places tag cloud.

Empty Homes Week 2014 - 1st to 5th December

1 Dec 2014
5 Dec 2014
Event Description: 

See our news story .

Contact details: 

Empty Homes Week 2014 - 1st December to 5th December

Helen Williams, Chief Executive of the campaigning charity Empty Homes Agency, has announced the dates for this year's Empty Homes Week - from the Monday 1st to Friday 5th December 2014.

An announcement on the Empty Homes Agency website reads

The Empty Homes Agency is encouraging all those working to bring empty homes back into use to make the most of this week to publicise the good work that they are doing and to make the case for plans to bring long-term empty homes back into being a priority both locally and nationally.

The Empty Homes Agency is encouraging people to let them know what they are planning that week by emailing them at : policy@emptyhomes.com.

They will be launching a new campaign to address long-term empty homes as part of that week and will keep people updated through their website: www.emptyhomes.com

We hope that practitioners will do just that - and announce their activities on the EHN website too.

(It seems that Helen has now revived the full name Empty Homes Agency (which had always remained the legal name of the organisation). We understand from David Ireland that the "Agency" had originally been dropped because it suggested to people that the charity was some kind of quango (eg, like the HCA or VOA). But the reduced name "Empty Homes" on its own often proved awkward in practice.)

£10million more for Wales Houses to Homes scheme

The Welsh Draft Budget for 2015-16 adds yet another £10million to the Houses to Homes loans initiative, bringing the total to £30million since the inception of the scheme.

The Draft Budget notes:

Financial transactions funding of £10m in 2015-16 to expand investment in this scheme to over £30m since its launch in 2012. This successful initiative has already delivered almost 500 residential units and leveraged an additional £7.8m of private sector funding to bring empty homes in Wales back into use and increasing the supply of housing across Wales.

The next evaluation report for the scheme, authored by Sheffield Hallam University, is due within the next couple of months and is expected to demonstrate the continuing success of the loans scheme.

When is "an empty home" not an empty home?

This is a blog post from the Leeds Empties site - but hopefully of interest to EHN members.

 

Most of us will have an idea of what we expect an “empty home” to look like. It’ll probably be boarded up.  It might have rubbish in the front garden.  There may be grass growing in the guttering.  In short, it’ll look a right mess, and will be having a negative impact on the neighbourhood.

So what if we suggested that out of around 5000 long-term empty homes in Leeds  (the actual figure varies depending on exactly how you count – but we’ll stick with this round figure for now), perhaps only 500 are like this?  We’ve been working on empty homes for three years now –  and like most people, when we started we had strong preconceptions of what “empty homes” were.  The empty homes we’d spotted were the boarded up ones – and then we were told there were 5000 empty homes.  So we assumed there were lots more, just like those, spread across the city.

As is often the case, we’ve since found out that it’s a bit more complex than that.  That’s not to say that it’s any less of an issue – it’s just perhaps a slightly different issue to the one we might think it is.

So we’d like to share with you some reflections on what we’ve come across over the last couple of years – different situations, different “types” of empty home – which together paint a different picture to the one you might be accustomed to.  In future posts, we’ll explore the implications of this for future strategies to bring more empty homes back into use – both in Leeds and across the UK.  We’ll also outline the kind of situations where we think we can be of most use.

What is a long-term empty home?

A home is defined as a “long-term empty home” when it’s been unoccupied for six months.  Empty homes statistics are gathered from Council Tax records – so are reliant on people giving accurate information about their property to Council Tax.  The data, it would seem to us, was more reliable in the past as there used to be a financial incentive to contact the council when your home became empty – as a discount on Council Tax used to be offered.  This discount no longer exists – so it’s likely that there are empty homes in Leeds which aren’t currently recorded as empty.  Similarly, it’s possible that there are occupied homes that are currently recorded as empty homes (as the occupant/owner hasn’t informed Council Tax of the change in circumstances, as they were already paying full Council Tax).

So, as you can see, the stats can be a bit complicated.  Most of the time, at Leeds Empties, we don’t worry too much about the detailed stats – other than to acknowledge that there are lots of empty homes – and we want to bring back into use as many as we can.

For now, let’s take the 5000 figure, as it won’t be far wrong, and it’s a nice round number.  Let’s start to look at the “types” of empty home that make up that 5000.

Please note that all of this is based on our experiences – rather than detailed analysis of data.  So in some cases, we may be wrong – and our guesses on numbers might in some cases be wide of the mark – but after 3 years working on empty homes we’re pretty confident about what we’re saying here.  

Homes Sold (Subject To Contract), For Sale, To Let or under renovation

It’s worth recognising that a good number of “empty homes” are in the process of being rented out or sold, or are under refurbishment.  When we’ve focused on particular areas, such as LS28,  we’ve found that around 25% of long-term empty homes fall into this category.  Sometimes we can help (for example we’ve helped people to consider alternative estate agents or letting agents) but more often than not, the thing that will sort out most of the homes in this category is time.

So, we’d suggest around 1250 of the 5000 “empty homes” are currently unoccupied for a pretty good reason – and in most cases, they’ll be occupied again sooner rather than later.

Problematic empty homes

Of the 5000 empty homes, we’d guess there may be 500 that look like how you might expect an empty home to look.  The windows may be boarded up.  The garden may be overgrown.  Typically they’ve been empty for at least two years.  The adjacent house may be suffering from damp, or vermin.  In one-way or another, the home is causing problems.

These homes are the ones primarily dealt with by the council’s Empty Homes Team.  They’ll engage with the owner to encourage them to bring the house back into use, and they’ll threaten – and take – enforcement action where appropriate.  This can include doing work in default (e.g. tidying up an overgrown garden and charging it to the owner) through to compulsory purchase.

We deal with some homes like this, and have had some successes – but such problematic empties tend to be the focus of the council’s team.

At a guess, we’d say that homes like this account for around 10% – or 500 of the 5000 empty homes in Leeds.

Empty homes that are difficult to rent out

There are some empty homes where it’s hard to work out a way forward.  For example the data on Leeds Data Mill suggests there are around 20 pubs in Leeds with vacant accommodation above the pub.  It’s likely to be difficult to rent that accommodation out to a third party.  Similarly, lots of shops, particularly on suburban shopping parades, have flats above them, which can sometimes be difficult to rent out separately.

There are also homes that are perhaps undesirable – such as basement flats in terraced houses that have been converted into six bedsits – something you see a lot of in inner-city areas such as Cross Green, where we are based.  Again, Leeds Data Mill suggests there are a number of terraced houses that have been split into flats/bedsits, where some of the flats have been empty for some time.  (And remember, a “home” in this context can be a bedsit or a flat, as well as a house.)

At a guess, we’d say there are 200 homes that would fall into this category.

Zombie empties

This is a term we came up with for empty homes that were typically bought as buy-to-let investments, in inner-city Leeds, between around 2003 and 2007.  After the financial crisis hit in 2007, the value of many of these houses fell.  A number subsequently became empty, and whilst the owners typically can afford to pay the mortgage, they often can’t afford to invest in the property to bring it back into use.

They also are unable or unwilling to sell, as the sale value would not cover their outstanding mortgage.  So the homes stand empty – with nothing likely to happen until the owner either stops paying their mortgage (so the home is eventually repossessed) or the house value rises back to where it was and the owner can either sell or borrow to undertake renovations.

In some cases, we have worked with owners to help them to explore lease-and-repair schemes – where a third party (in the cases we worked on, a social enterprise) offers to lease the property, do repairs and bring it back into use  - with their investment being repaid through rental income.  We have been successful in arranging one such scheme, but in the majority of cases, either the owner or their lender has refused to pursue this option further.

At a guess, we would suggest there are 150 zombie empties, primarily in inner-city postcodes.

Empty homes owned by companies in administration

There is data available on Leeds Data Mill about empty homes owned by Limited Companies.  We’ve done some analysis of this data which suggests that at least 25 empty homes in Leeds are owned by companies in administration.  We suspect at least another 50 are owned by companies which are not currently trading.

From previous experience, we’d expect many of these homes to be sold at auction by the administrators.  However, it’s possible that this could take some time.  A number of the homes owned by companies in administration have already been empty for more than two years.

So we’d suggest homes owned by companies in administration/not currently trading account for approximately 75 of Leeds 5000 long term empty homes.

Unsold houses and flats in new developments

Looking through the data on Leeds Data Mill, we identified a number of flats and houses which appear to still be owned by the original developer.  It’s hard to tell for sure, but we think there are at least 50 such properties.  Without looking into the detail, we can’t tell exactly what is happening with these properties, but we’d assume that they are slowly being released to the market, and as such, will eventually be lived in.   We’re told that there were far more homes that would fit into this category three or four years ago – when there were more unsold city-centre flats.

Other empty homes owned by companies

Leeds Data Mill data suggests there are 400 long-term empty homes owned by limited companies in Leeds.  We’ve accounted for some of these above – such as those owned by companies in administration, by pub companies, or by the original developers, but it leaves at around 250 more which are owned by companies, for a host of different reasons.  Without contacting the companies directly, it’s difficult to speculate on the reasons why they have properties which are long-term empty.

“Buy-to-leave” investors

This has traditionally been seen as an issue primarily in London and the South East – with investors buying properties, leaving them empty, and then selling them for a significant profit at a later date.

Whilst it isn’t such a big problem in Leeds, we suspect that a number of homes are left empty in Leeds by owners who have no medium-term plans to either live in the property themselves, or rent it out.

We have come across long-term empty properties, particularly in more affluent suburbs of Leeds, which we suspect are owned by “buy-to-leave” investors.

In some cases, the homes are ready to live in, or require only minimal refurbishment work.  In such cases we suspect the owner has made a considered decision to do nothing, and wait for the value of the house to rise.  In other cases, we suspect that people have bought a home for cash, as an alternative investment to low-yielding savings – but do not have further cash to invest in the property.

Of course, people are free to leave a home empty as long as they pay council tax and the house doesn’t cause problems for neighbours – but the wider societal impact of treating housing as an investment in this way is that a decent home is not available for other people to rent or buy.

It’s hard to estimate how many homes fall into this category, but we’d suspect there may be around 150 such properties in Leeds, mostly in the more affluent suburbs.

So, we estimate that the “types” of empty home that we outline above account for around half of the long-term empty homes that we have in Leeds.  They’re unoccupied, at a time when there is severe pressure on current housing stock, and plans to build 70,000 more homes by 2028.  But they’re probably not what you might think of as “empty homes”.

This has implications for our work – and the work others do across the country – to bring empty homes back into use.  An approach that will work for the owner of a boarded up home will be very different to one that will engage someone who’s happy to do nothing and see the value of the house they own rise over time.  We don’t have answers to this yet – but it’s the kind of thing we’re thinking about carefully as we explore how to expand what we do, so we can help to bring back into use more long-term empty homes.

Office-to-residential conversions have variable impact nationwide

Research by the Local Government Association seems to indicate that the relaxation of the planning regime around conversion of offices to residential use has had a varibale impact around the country.

A significant proportion of responses highlighted the predictable negative effects such as displacement of businesses, absence  of contributions to  affordable housing  and infrastructure. But it is a surprise that the negative responses were not higher.

22 questions were sent electronically to Heads of Planning Services and the 29% response rate itself perhaps indicates a relatively low level  of concern  in many areas. It would have been interesting to see the breakdown of respondents by type of authority or area but this information is not reported. 9% of authorities had received no "prior approval" notifications and another 42% between 1 and 10 - so over 50% of respondents were dealing with fewer than 10 such schemes. But 4%  were responding to between 100 and 139 schemes while a further authority was dealing  with 210 schemes. 4  of these authorities  were London Boroughs, perhaps driven by very high  London property values, and one was in the  East of England.

Empty or  occupied?

One of the big questions about the prior approval regime for conversions, and the one of most relevance to empty homes  practitioners, is whether the buildings in question are occupied or empty. A surprising 41% said they didn't know.  This indicates that the government is not asking local authorities to monitor this important aspect of the measure which will hinder an objective assessment of its impact.

Of those wtho did know,  it seems that 27% said that over 50% of  the applications concerned premises that had  some element of occupation; and the figures indicated that the more applications were received by a particular authority, the more likely it would be for a higher percentage to be occupied. This makes sense - both figures suggest a stronger drive towards conversions.

Scale of schemes

There were signifcant  differences between the scale of the conversions. Towards one end of the scale schemes in an authority that saw approval granted  for 1,485 new units approved had an average of 23 units per prior approval (indicating just under 70 schemes); yet in another authority, the high  number of 121 schemes approved only equated to 264 units, at just over 2 per  prior approval.   It would have been interesting if this data had been collected so as to allow analysis into percentiles of scheme size to see whether the averages were distorted by outliers.

Affordable Housing

In total, the report suggests that 3,107 affordable units had been lost nationwide because of the permitted development rights. In reality,  the number is likely to be significantly lower as the 3,107 is presumably predicated on the policy requirement for affordable housing, whilst developers are currently driving a cart and horses through such policies on the back of the ubiquitous viability assessments. The combination of existing  use values and costs of conversion works would in any case tend to create problems around achieving the full  policy quota, even in a more favourable climate. In the circumstances it is not altogether surprising that only half of the respondents agreed that the permitted development regime had reduced contributions to affordable housing.

Overall impact

There was a surprisingly muted response to the overall  impact. For example:

"One in four tended to agree that the PDO had reduced the availability of office space within the local area".

It is  difficult to see how it could have done anything else but reduce the availability of office space: perhas the question was interpreted along the lines of whether it mattered (eg low grade space in low demand).  Similarly, as  regards the number of residential units created:

"Seven per cent strongly agreed and 28 tended to agree that it has increased the number, compared to 31 per cent who did not"

For those who suggested that it had not increased the number of residential units, one can only assume the respondents believed that planning permission would have been forthcoming anyway. But that does not look like the picture in the London Boroughs, which were collectively strongly resistant to the measure. It would  be have been interesting to see the responses here cross-tabulated with the numbers of units or schemes being put forward.

The  LGA press release on the research can be accessed here. The research itself is downloadable from the same page.

RICS survey

Elsewhere, a separate survey by the Royal Institution of Chartered Surveyors, reported in the Financial Times indicated that the conversions definitely are reducing the availability  of office space:

But the new rules are disproportionately affecting economically successful areas such as London and the south east where house prices far outpace the value of even high-quality office stock, RICS found.

In the south of England a third of those surveyed by RICS said that conversions to housing were having a substantial impact on the availability of commercial stock in their area. Nationally, the figure was 18 per cent.

Another FT story reports that Boris Johnson has teamed up with the British Property Federation and others to write to Eric Pickles to request that key London business areas continue to be exempted from the permitted development regime.

The tanker turns - Lloyds Group to accept leasing

The Lloyds Group has made a strategic decision to allow its borrowers to put their homes into leasing schemes. This is a victory for common sense and is the culmination of a significant effort by the Empty Homes Network and by influential people within the bank itself.

The decision by the governing powers within the bank will take a while to filter through to all the operational levels - the analogy with turning round an oil tanker is a fair one given the size of the bank - but the process is underway. And because the bank is so large, with over 25% of the UK mortgage market, the significance of this move is correspondingly greater. It establishes a reference point within the mortgage market that will influence others. 

Meanwhile Lloyds Group banks - including major players such as Halifax - can utilise this new flexibility to promote their products: borrowers can see that their loans are being future-proofed against changes of circumstance that might involve them wanting to lease their homes. 

Partnership response

It is now over 18 months since EHN initated a meeting with the Council of Mortgage Lenders to attempt to address the issue of borrowers from all banks being refused consent to lease their homes to social housing providers, or terms being imposed (such as unacceptably short lease terms) that would make such arrangements impossible for the providers to sign up to.

Since then, Mark Fisher and Darryl Lawrence (EHN Executive members) have met with interested parties on the lender side on several occasions, for example addressing the CML-organised Buy-to-Let meetings. David Gibbens (EHN Policy Lead) joined them in liaising with CML and DCLG and produced a Briefing for lenders that was referenced by Don Foster (then Minister for empty homes) in answer to questions posed by concerned MPs.  And, importantly, within Lloyds itself Michael Vennard, who spoke at the EHN-organised Empty Homes Conference in May 2014, has promoted the commonsense view that has finally led to the adoption of a pragmaticpolicy around leasing. His involvement has been crucial.

So this has been a co-operative effort, but one in which EHN can rightly take the credit for being the prime mover.

EHN members can help implement the new policy by referring any refusals through to admin@ehnetwork.org.uk . We will pass them on, and this will help Lloyds identify any operational obstacles to implementation.

Picture credits: Royal Navy Media Archive. Some rights reserved under Creative Commons licence. Original photo Flickr.

Government issues guidance on definitions of empty homes and second homes

The Department of Communities and Local Government has issued a letter to clarify the definitions of empty homes and second homes.  The letter, signed by Hülya Mustafa, a Deputy Director for Council Tax, seems to have been prompted by concerns about avoidance, whereby otherwise empty homes have furniture put in them specifically to avoid the Empty Homes Premium.

Incidence of avoidance

The letter is keen to point out that there is little evidence for people introducing furniture into properties to avoid paying the Empty Homes Premium. Anecdotal evidence from around the country generally seems to support that view but members with different experience or concrete data to report are encouraged to add a Comment to this story accordingly. You'll need to log in to do so.

Who decides

As regards the meanings of "unoccupied" and "substantially unfurnished" the letter emphasises the central role of local authorities' views along with the views of any court that might decide on the issue, and indicates that the courts would treat the matter on its own merits, as "a matter of fact", rather than deferring to the government's guidance. 

In adopting this position, DCLG is not being evasive: this can be considered the normal and appropriate government stance in circumstances where there is no statutory guidance or any powers to issue such guidance.Were it to do more, it could rightly be criticised for over-stepping the limits of executive authority.

Criteria

As far as it goes, the specific government advice on determining whether a dwelling is  "substantiallly unfurnished" and/or unoccupied runs as follows:

A property which is substantially unfurnished is unlikely to be occupied or be capable of occupation. A property which is capable of occupation can reasonably be expected to contain some, if not all, items from both of the following categories: furniture such as bed, chairs, table, wardrobe or sofa, and white goods such as fridge, freezer or cooker.

Where a property is said to be occupied it will be reasonable for the local authority to cross-check with the electoral roll , or ask for evidence, such as utility bills showing usage of services, driving licence as proof of address, or receipts or other proof of moving costs.

Reference is made to other guidance but the letter does not contain hyperlinks to the documents mentioned such as the advisory notes related to properties for letting or for sale (accessible via our library here).

Penalties

As regards tax evasion rather than tax avoidance, the letter points out that there are civil penalties attached to people deliberately  supplying false information. Under the council tax legislation there is a fixed civil penalty of £50.  It also notes that the Theft Act 1968 applies to council tax though it does not elaborate as no doubt the position will be clear to those in Council Tax departments who are presumably the target readership. The following notes from LB of Merton spell it out:

The Theft Act 1968 also applies to Council Tax where a person presents information which they know to be false with a view to obtaining a financial benefit to which they are not entitled. You could be subject to prosecution for obtaining a pecuniary advantage by deception.

EHN emerging policy

The letter expresses the current position as seen through government eyes. But what would be the preferred position? EHN policy, as elaborated to date though not formally adopted, would be as follows:

  • drop the distinction between second homes and empty homes by removing the criterion around the presence of furniture
  • therefore distinguish only between homes that are occupied as someone's main residence and homes that are not (the latter could be "second homes" or "empty homes")
  • apply Empty Homes Premium after 1 year not 2 and at a rate of up to 100%
  • apply EHP to all homes that are not primary residences - thus "second homes" too.

In addition, we would expect to support a tighter definition of "occupied as a main residence". The current definition of 6 weeks occupation, i.e. 42 days over a period of 2 years would mean the property would need to be occupied for just under 6% of the time to avoid the Premium.  In the context of incentivising best use of our housing stock that seems too small and we would suggest that the period is increased to 3 months.  If the qualifying time were reduced to 1 year, then that would represent a "25% occupancy" criterion, hardly draconian.

You can access the letter via our library from here.