Empty Homes Network

Liverpool "Homes for a Pound" scheme - major expansion on cards

Liverpool City Council's Cabinet Committee is to consider a major expansion of the "Homes For A Pound" scheme at its meeting on April 2nd, to be dubbed "Homes For A Pound Plus".

A report in the Liverpool Echo also features some video clips of a house that has already been refurbished through the 20-property pilot scheme. Now the aim is to bring another 150 properties into the initiative in the Picton area  An innovative aspect of the new proposal is a pilot "Shops For A Pound" strand, addressing vacancy in the commercial units on nearbby Smithdown Road, an A-road leading into the city from Speke and Widnes.

The homes scheduled to be brought into the scheme seem to be in a "clearance area" and the Council is intending to ask the HCA to release it from charges on the properties which it acknowledges are being sold at less-than-best value.  This will be an interesting part of the exercise and highlights the rarely-ackonwledged aspect that such schemes do involve a transfer of value from the public sector to the private sector. It is never clear in these cases whether the homes might instead be sold for £100, £1,000 or £10,000. The "£1 home" is a powerful brand however.

Key sections of the Cabinet Report read as follows:

Executive Summary

On 19 December 2014 Cabinet adopted a Ten Point Plan for bringing a further 2,000 empty properties back into use. This set out a number of initiatives for tackling empty homes. The report included a proposal to introduce ‘Homes for a Pound Plus’ which builds on the success of the Homes for a Pound pilot scheme.

This report outlines the plans for bringing forward ‘Homes for a Pound Plus’ which will deliver an extra circa 150 homes brought back into use with a particular focus on regenerating the Picton area. The report also details proposals for a small scale Shop for a Pound scheme to be piloted in the Picton area as part of a comprehensive approach to neighbourhood regeneration.

Background

In February 2013, Cabinet approved a homesteading programme for the Granby Four Streets, Arnside Road and the Webster Triangle area of the City. This programme was called Homes for a Pound and attracted considerable media attention and public interest by offering 20 homes for eligible applicants for £1. This report also made reference to the adjacent Picton Phase 3 (clearance area) and it is now proposed that a project is developed to refurbish void properties in the Picton Phase 3 area alongside Webster Triangle.

A formal application process was launched in April 2013 with clear eligibility criteria and conditions. To be eligible applicants needed to live or work in Liverpool, be first time buyers and be in employment. Selected applicants would be required to live in the property for a minimum of five years and not permitted to sub-let it. The scheme was massively oversubscribed and all 20 available homes have now been matched with relevant applicants.

The selected properties have been made available to the successful applicants through a licence agreement initially while the refurbishment works are undertaken. On satisfactory completion of the works the ownership of the property is transferred to the purchaser.

The Homes for a Pound pilot has been positive for a number of reasons:

  • It has levered in around £750,000 of private investment in long term vacant dwellings;
  • The scheme has complemented other regeneration initiatives going on in the target areas;
  • It has provided home ownership opportunities for people who would otherwise have been excluded due to mortgage lending restrictions; and,
  • The pilot has enabled the development of a delivery model that includes a robust assessment process, an appropriate legal agreement and suitable insurance cover.

Homes for a Pound Plus:

The Cabinet report of 19 December 2014 signalled the intention to build on the success of the pilot scheme by expanding the scope and extent of this approach. The key elements of Homes for a Pound Plus will be as follows:

  • A focus on circa 150 Council owned properties in the Picton area which are currently void. The properties will be split into five separate phases based upon condition and geography with each phase released to the market sequentially to avoid market saturation and better manage demand;
  • Exploration with relevant social landlords to include void properties they own within the scheme;
  • Undertaking of remedial structural works on those properties in particularly poor condition to make them viable for the Homes for a Pound approach;
  • A review of the current waiting list to establish whether those who applied in April 2013 are still eligible and interested in the scheme;
  • Opportunities for new applicants to express an interest in the scheme; and,
  • The development of a financial assistance product for applicants who are not in a position to fund refurbishments from their own resources.

This package of measures building on the development of the new Archbishop Blanch secondary school to the west of Tunstall Street offers a clear plan for the regeneration of Picton.

Homes and Communities Agency (HCA) Charges

There are HCA charges registered against the properties and agreement will be required with the HCA to release their charges in order for the Council to dispose of the properties. The agreement for release with the HCA will need to be documented by a deed of variation to the current agreement with the HCA.

Shops for a Pound

The Council currently owns a number of shop units along the Smithdown Road corridor abutting the proposed Homes for a Pound Plus area in Picton. These shops are currently vacant, require investment and are in an area where it will be difficult to find a viable commercial future for the shops.

Leaving these shops vacant or failing to find a sustainable future for the units would significantly impact upon the proposed Homes for a Pound Plus initiative. It is therefore proposed that the Director for Regeneration and Employment be requested to develop a ‘Shops for a Pound’ scheme for these units – exploring the opportunities to either sell off or lease the units to businesses who would be able to invest in the sites and bring them back into a use in a manner that would be appropriate and add value to the local community.

A potential sting in the tail is whether the Crichel Down rules are engaged, as the homes were bought under "threat of compulsion". The normal arrangement would be that the homes should be offered back to the original owners at market value. The owners might have been private landlords. The Cabinet report discusses the Crichel Down rules in the following terms:

This government policy guidance outlines how properties acquired for regeneration under Compulsory Purchase Orders (CPO) powers or threat of CPO are ‘offered back’ to previous owners, should the original purpose of the acquisition change. As the properties to be included in the scheme were acquired under the “threat” of compulsion the Crichel Down Rules (“Rules”) are prima facie engaged.

There is an expectation that public bodies comply with the Rules and the Council has taken Counsel’s advice on the application of this policy for this proposed new scheme. The Council are advised that the Council’s Cabinet are to determine if the Homes for a Pound Plus and Shops for a Pound are exempt from the Rules and the requirement to ‘offer back’ the ‘land’ (at it’s current market value) does not apply. An exemption could apply as selling the properties back to the original owners is not likely to achieve the original purpose of the acquisition i.e. to improve housing quality, choice and amenity and that offering the properties back would be inconsistent with the original project (paragraph 15 (part 5) of Part 2 of Circular 06/2004). It is submitted that this is the case because the aim of the acquisitions was to deliver a step change in housing conditions in the area, and it is likely that the sale of the properties back to the same owners would result in the same issues as existed previously, whereas the proposed Homes for a Pound Plus scheme will ensure that the properties are improved to a decent standard.

Should the Council’s Cabinet agree that the proposed project is exempt from the Rules and offering the properties back to the original owner does not apply, the Council will need to write to all persons from whom property was purchased to notify them of the change in the proposed regeneration scheme and that ‘offering the property back to them’ is exempt from the Rules and that it is reasonable that for the Council to achieve the original housing objectives it is not required to ‘offer back’ the properties at full market value to the original owner. Notices will also be placed on the site for a period of two weeks to ensure other interested parties are aware.

This is one of the points (Point 9) identified by George Clarke in his advice about regeneration, advice which seems to have become policy and which the Council (or its developer PlusDane) has already fallen foul of in the case of the Welsh Streets redevelopment proposals. In principle, one would have thought that the rules would have to be applied case-by-case: in other words, some previous owners might well be capabel of producing the improvements in quality of housing that underpinned the original clearance programme.

Development Benefit pilots fall flat

Over the last few months, at meetings or via the website, EHN members have been alerted to the possible risks to New Homes Bonus implied by the government's desire to introduce a "development benefit" that would offer financial rewards to people living near new housing developments.

Given that rewarding people for accepting development was one of the key justifications for the New Homes Bonus, the Development Benefit proposal looked like an alternative - one that might be cheaper and which would perhaps not be subject to the same criticisms levelled at NHB by the likes of the Audit Commission or Commons Committees.  In short, it looked like a risk to the work done by empty homes practitioners: if the reward no longer went to the local authority but directly to local residents, it would undermining one of the important justifications for empty homes work in the age of austerity, namely that it produces New Homes Bonus.

This particular risk seems to have been averted for now, however.  DCLG has announced (26th March 2015) that it is not going to proceed with the pilots. The foot of the web-page for the Development Benefit consultation explains:

Only 3 expressions of interest were submitted for this pilot. However, the initial attitudinal research to support the pilots has revealed some interesting insights into the opposition to development. We are looking into how opposition to development transmits into the planning system and the potential role of financial incentives in changing this.

We have decided not to proceed with pilots at this time.

 

2015PolicyDocAd

Timeout: 
6.00
See our policy document and our 5-point plan

Conference2015AD

Timeout: 
4.00
Link to Conference page

May Conference: Kent No Use Empty initiative becomes Gold Supporter

No Use Empty logo

We are pleased to announce that the Kent No Use Empty Initiative has become a Gold Supporter for the National Empty Homes Conference organised by the Empty Homes Network for 20th May 2015 in Birmingham.

The Kent initiative has established a fantastic track record on delivery and aspects of its model have now been exported to Wales and to the West of England partnership of four authorities around Bristol. Support from No Use Empty represents a big vote of confidence in our Conference.

About No Use Empty

Background

No Use Empty (NUE), launched by Kent County Council (KCC), celebrates its 10th Anniversary in 2015. All 12 authorities in Kent participate in the initiative to substantially increase the number of long term empty homes returned to use as good quality housing through a range of interventions.

Loan scheme

Empty property owners can apply for a loan of up to £25,000 per unit to a maximum of £175,000. Kent County Council has issued £12M loans since 2005. The loans have leveraged additional private funding of £16M, ensuring local businesses and contractors benefit with monies being spent on materials as well as job creation or safe-guarding jobs.

Awards

No Use Empty has created over 3,700 new homes to date and was “Highly Commended” in the LGC Awards 2015 for Best Housing Initiative and Partnership Working categories.

 

Life in the Lakes - March 2015

Life in the Lakes

March  2015

I am currently feeling very happy with the end result of our first empty homes grant, part of our new empty homes grant management scheme.  Or as they say in this neck of the woods ‘job’s a good ‘un’!!  There’s now a very contented family living in what looks like a new home – mum, dad, 3 kids and dog!  Result!

We persevered with the prototype legal agreements needed for this scheme, which took a long time to complete.    Now it all feels worthwhile.

Prior to this scheme, I always felt that empty home owners, as a general rule, didn’t want to project manage repairs or to be a landlord.  This scheme seems to be ideal for both our empty home owners and for our district council – it means we are effectively the co-ordinators, and our partner housing association are the project managers and managing agent for the property.  It’s a good ‘match’ all round.

The ‘icing’ on the cake was the lovely positive press coverage we had, which I hope will attract more empty home owners.  In fact we’re off to visit an interested owner today….

Lynne Campbell, Empty Homes Officer, South Lakeland District Council

Meeting the challenge of low demand? - News Review

220 empties in Horden street survey

There have been a fair few stories over the last two or three weeks about significant numbers of empty homes in Durham mining villages near Easington which demonstrate that the issues associated with "low demand" - and the search for solutions - are still very much alive.

In the news stories it is Horden in particular which has been singled out, with a claimed 130 empty homes owned by Accent housing association now slated for disposal and reportedly another 130 to follow.

Factoids

Most of the key elements in the story seem to be discussed in a Channel 4 News clip and a story the following day and could be summarised as follows:

  • the "broken window" effect means that the level of vacancy is a major deterrent to people moving in and is thus self-perpetuating
  • many of the empties (most?) are owned by Accent housing association, which is planning to dispose of them in the open market
  • Accent says that 67% of its two-bedroom homes were let to single people, mostly unemployed, and the bedroom tax was "the straw that broke the camel's back"
  • nevertheless when they converted a two-bedroom home into a one-bedroom it apparently still could not be let
  • there was a significant decline in social conditions over an indeterminate number of years but that did not follow directly on the closure of the colliery
  • Accent failed to sell the homes for £1 each to Durham County Council, which claimed the homes needed too much work
  • there are claims that Accent failed to keep the homes in good repair
  • it is claimed by some that two-bedroomed Victorian terraced houses are so little in demand that they should be considered obsolete
  • there are 11,000 households on the waiting list
  • homesteading is a popular option amongst those seeking solutions.

Bigger picture

What has been little discussed are the broader regeneration issues such as employment and also the extent to which problems have emerged in, or have been created by, the private housing market (eg the incidence of poor quality private rented accommodation let by disengaged private landlords).  A survey by the local residents' association indicates that 220 properties are empty which might be taken as evidence that there 90 vacant private sector homes alongside the social housing.

A case study

Although posing some problems that are different from those of Liverpool's Welsh streets  - which, being within walking distance of the centre of the city, might have lent themselves to "organic" gentrification had the nuclear option of enforced gentrification not seized the imagination of the powers that be - the locational factors at Horden are not totally disadvantageous either. The village is on the Durham heritage coast and a railway station is being built that might reasonably be expected to make a significant difference to the desirability of the village as a place to live.

The priority is to find solutions; but at the same time, there is a need for some thorough research here that would plot the causes and trajectory of the decline in more detail, explore the solutions, and provide a template for earlier interventions elsewhere. On the evidence supplied it is easy enought to conclude that Accent's responses have not been imaginative or timely enough to address the emerging difficulties, a point made quite strongly by the local MP who also accuses the HCA of failing to intervene.  But perhaps it is all too easy to point fingers: it would certainly demand an exceptional combination of leadership and a sophisticated, multi-agency place-making strategy to tackle the diverse underlying issues involved, which are not all under Accent's control (the bedroom tax being a case in point).

Local residents, with support from community housing expert Jo Gooding, are now mobilising to create some alternatives to outright sale in the open market. It is this kind of energy—the kind of energy that large bureaucratic organisations can rarely supply— which might turn things around.  The hope would be that this could build sufficient momentum to decisively reverse decline: the fear, that it would be too little, too late.

And the need for a more strategic approach with other players involved is well illustrated by the saga of Horden's late-running railway station. The original one was axed by Beeching in 1962 and the new one, called Peterlee, is now scheduled to be opened in 2016, but that will be nearly thirty years after the colliery and power station were closed in 1987, destroying the local economy.  Taking into account this tardy response from the masters of the region's infrastructure (whoever they are and have been), the thought occurs that perhaps it is not the houses that have fallen out of fashion so much as the people who live in them.  Hopefully a resurgent residents' association can put them back on the map.

Other stories and information

Canopy report reveals benefits of empty homes project

Canopy Housing CBA report - front cover

A report commissioned by Canopy Housing Project in Leeds and published early in 2014 shows the benefits that self-help housing can bring to a range of different stakeholders.

Written by Andy Bagley (Real-Improvements consultancy), this is a first-stage, preliminary report on the Social Return on Investment (SROI) provided by Canopy's project to bring empty homes back into use, a project which also draws in volunteers, provides homes, and helps people into training and work. 

A fuller evaluation is understood to be in the pipeline: the current report notes

Stage Two of this project, developing a full SROI analysis, will take a much more rigorous approach, and will test with volunteers, tenants and other stakeholders exactly what benefits they experience in practice.

On the basis of the more limited methodology used in the report, Canopy has produced £4.28 of social value for each £1 of external investment. Examples of social value include obvious measures such as reduction in benefits payments but extend also to less obvious and perhaps less-easily-quantifiable measures such as "better family relationships".

Under-estimates?

It may be that the current report does not take into account all the benefits of the project. For example the following are not included:

  • there is the widely-reported (but hard to access) research from Hometrack from June 2003 that found that neighbouring homes can lose up to 18% of their value if sited next to an empty property
  • housing benefit savings to the local Council seem not to have taken into account the possiblity that tenants were previously in much more expensive homeless accommodation.

Benchmarks for SROI/CBA

The diversity of sources drawn on for benchmarks from which to calculate the benefits is itself of some interest, suggesting the desirablility of robust, evidence-based datasets at national level that could then be drawn on for this sort of exercise. There are Cabinet-Office-branded documents available dating from 2009, but there seems to be no comparable material on the current gov.uk website - although perhaps this is just because thinking has moved on to the what-works network. The 2009 documents - no longer Cabinet-Office-branded and now featuring 2012 updates by the original authors   - are most easily accessible from the website of the SROI Network.

Further information

The report is downloadable from our library here.

For people blessed with unlimited curiousity, there is a discussion on the SROI Network website of the difference between Cost-Benefit Analyses and SROI here.

Empty Homes Network launches first Online Practitioner Guide to enforced sale

EHN screenshot of Enforce Sale Guide

The Empty Homes Network is pleased to be able to offer its first online Practitioner Guide. The new Guide to Enforced Sale has been written by Chris Skinner

Chris, a solicitor at Norfolk County Council's shared legal services nplaw, is known for his work on enforced sales and compulsory purchase orders and will be speaking at our May 20th Conference.

We expect to convert our other Practitioner Guides to the online format over the next few months.This will make them much easier to update, so members can always then be sure of looking at the latest version.

A new menu option has been added under the Practice menu linking to the (currently rather short!) list of online Guides - or simply click here.

NB: Most Guides will only be available to our Full Members so you'll need to have the necessary permissions and be logged in to access the material. For further information about our membership categories, refer to our About Membership page.

Council tax exemption B case clarifies the rules

Royal Courts of Justice

A recent court High Court ruling clarifies the position regarding the rules around Council Tax Exemption Class "B" and suggests that it will be very easy for charitable housing assocations or other charitable bodies to benefit from the exemption, regardless of the rent charged in most cases. 

For the record, Exemption Class "B" reads as follows:

"a dwelling owned by a body established for charitable purposes only, which is unoccupied and has been so for a period of less than 6 months and was last occupied in furtherance of the objects of the charity"

An important part of the background is that prior to its abolition in April 2013, housing associations could simply have invoked the 6 month exemption offered by Class C for any unfurnished dwelling: previously there would have been little need to rely on the Class "B" exemption, other than for the rare furnished property (perhaps in supported housing).  As the judge quaintly put it, "The repeal of Class C has caused Class B to be pulled into the sunlight" for those charitable housing associations able to claim it.

The case was heard by Justice Mostyn and involved vacancies following three tenancies granted by two different housing associations in three London Boroughs (for the details of the case refer to the full judgement in our Information Library  Full Members only).  The local authorities were appealing against a decision by Graham Zellick, President of the Valuation Tribunal.

What was at issue was the interpretation of the phrase "last occupied in furtherance of the objects of the charity" and in the background lurked the questions of how the previous tenant arrived there and the level of rent that might be charged in this era of "unaffordable" affordable rents.

Whereas Graham Zellick had apparently taken the view that by definition any tenancy granted by a charitable housing association would be of a "charitable" nature, the Judge on Appeal decided otherwise: there was a need for those claiming the exemption to provide a minimal level of evidence case-by-case and "inasmuch as the President
says otherwise his decision is not supported." 

He went on to rule that in two of the three cases, sufficient evidence had been provided, but not in the third. He also made it clear how simple it would be to create procedures that would meet the evidential requirement to claim the exemption:

In my judgment a short written representation by the applicant (which might usefully be done on some kind of standard form) which addresses all four conditions directly and which states (a) that based on the material held by the applicant the conditions are met and (b) that the statement is true to the belief of the representor, should normally be enough.

Students of the absurd, which most empty property practitioners necessarily are, might wish to reflect which of the three tenancies below were entitled to be regarded as meeting charitable objectives and which were not.

  1. 4-bedroom house, rent £154.53 per week, LB of Ealing
  2. 2-bedroom flat, let at a Fair Rent in 1990 at £25.86 per week plus £5.64 service charge, RB of Kensington and Chelsea (very complicated history here with transfers of tenancies and the like)
  3. 3-bedroom property, rent £420.00 per week (about £1800 per month), LB of Hammersmith and Fulham

Yes, the Fair Rent tenancy was the one that failed the test as the tortuous story of how the tenant came to be there and the rent came to be so low did not prove the charitable nature of the case; the £1800 per month property, being let via a leasing scheme to a homelessness prevention case, did fulfil a charitable purpose.

The judge suggested that there might be an amendment to the regulations to give a class exemption to charitable housing associations: this is somewhat counter-intuitive given his statement that charitable housing associations can also engage in non-charitable activities.

The fact that ALMOs and HRA properties can't benefit from Class "B" also creates some anomalies and suggests that a less arbitrary exemption might be appropriate that would cover all social housing equally and fairly. 

Picture by Elliott Brown

 

Creative Commons License
Elliott Brown picture is licensed under a Creative Commons Attribution 2.0 Generic License.