Empty Properties (Newcastle)

Lord Foster of Bath Excerpts

Monday 12th November 2012 Commons Chamber

[The Parliamentary Under-Secretary of State for Communities and Local Government (Mr Don Foster)]

I begin by congratulating the hon. Member for Newcastle upon Tyne Central (Chi Onwurah) on securing the debate and saying how pleased I am to see that a number of her colleagues have joined her, showing that they, too, have an interest in the matter. I very much hope that we will, as she has suggested, be able to work together on these issues. Indeed, I have now become, as she indicated I might, an assiduous reader of her website.

I also agree about the importance of creating more affordable homes. Now is not the time to go into details, but the hon. Lady will be well aware that the coalition Government have a very robust plan in place to provide 170,000 additional affordable homes over the period of the spending review. She rightly focused on the particularly important issue of empty homes, which, as she indicated, are a waste of housing and can be hugely damaging to neighbourhoods.

As the hon. Lady is well aware, homes become empty for all sorts of reasons. Some are being renovated, some are in the course of probate after someone dies, and many will come back into use relatively quickly through the normal operation of the market. In fact, there are nearly 750,000 empty properties in England at any one time, but around 279,000 of them are what she and I would refer to as long-term empty, meaning that they are empty for longer than six months.

Neglected properties, in particular, can quickly start to cause problems for neighbours, damaging adjacent properties, attracting vermin, nuisance, vandalism and other criminal activities such as drug dealing and prostitution. They can create unnecessary additional burdens on local authorities and local emergency services. They can quickly lead to an area’s decline, decimating the local community as well as having a wider economic impact, for example by reducing the value of neighbouring properties and discouraging future investment.

In Newcastle upon Tyne there are currently around 1,650 long-term empty houses. We have been in dialogue with the council and know that it is working hard to tackle the problem, and we congratulate it on the work it is doing. In fact, since 2008 the council has taken action in relation to more than 1,000 empty homes, and last year alone more than 290 such properties were returned to use with help from the council. I am sure the hon. Lady will be pleased to know that the council has benefited from £62,371 from the new homes bonus for bringing those empty properties back into use.

However, as the hon. Lady will know—she referred to this briefly—solutions to empty homes are as varied as the problems that cause them. We know that a one-size-fits-all solution will not work, so our approach is to enable local solutions which will tackle the specific local issues. That is why we have put in place the incentives and practical support to enable local communities to take the lead. In part, that will address her concern about the orders.

The Government have already committed £160 million to bringing over 11,000 empty homes back into use, and that is being delivered through some key funding streams. Some £100 million of that sum is to bring empty homes back into use as affordable housing. That is done through two separate routes, with £70 million of funding, through the Homes and Communities Agency, for registered providers and £30 million, through the empty homes community fund, for community and voluntary groups. Another funding stream is to tackle clusters of empty homes in areas of lower demand. Some of those will be at affordable rent, but there are also mixed-tenure schemes. We have committed £60 million of funding for that.

There is more to come. In the housing and growth package announced on 6 September, we said that we would use a share of the £300 million of capital funding and £10 billion of loan guarantees to bring a further 5,000 empty properties back into use. We will be announcing details of the programme in the very near future, and we will be looking for more innovative ideas such as encouraging more empty commercial property to be brought back into use as housing where that provides value for money.

[Chi Onwurah]

Will the Minister clarify whether this additional funding will be delivered through local authorities or through the private sector?

[Mr Foster]

I know that the hon. Lady is listening carefully to what I am saying, and I said that we will be making an announcement in the very near future. She will therefore not have to wait long for the details that will answer her question.

As well as direct funding, we have put in place powerful incentives for all local authorities to tackle empty homes, such as the new homes bonus. Local authorities earn the same financial reward for bringing an empty home back into use as building a new one—over £8,500 for a band D property. As I said, the Newcastle area has already benefited from that and other forms of direct funding. For example, I am sure that the hon. Lady is well aware that Leazes Homes, a subsidiary of Your Homes Newcastle and a registered provider, was awarded £160,000 to bring 10 empty homes back into use. Working with the Cyrenians, a leading local charity, it will aim to help some of the most vulnerable and disadvantaged people living in Newcastle by providing opportunities for them to gain new skills and qualifications. The Cyrenians have separately been awarded £500,000 from the empty homes community fund to bring up to 25 empty homes back into use across the north-east. That is part of their Homes Life project, which aims to refurbish properties working in partnership with local authorities and estate agents.

Newcastle city council itself has been awarded £491,000 over the next two years from the clusters of empty homes fund to bring 124 empty homes back into use. The funding will be used to offer financial help to empty home owners through grants and loans towards renovation works to the empty properties. Where incentives do not work, our funding will also help to gap fund enforcement action. The local authority has committed to match the Government’s funding, taking total funding committed up to £1 million by March 2014.

However, as the hon. Lady knows, sometimes offering advice and support of the sort that I have described is not enough. Where empty properties have become dangerous or are causing a nuisance to neighbours, and the owners will not co-operate in sorting the problems out, local authorities can make use of a range of powerful enforcement tools. As she will be aware, several of the measures in the Housing Act 2004 provide such tools. For example, part 1 enables the inspection of an empty home that is falling into disrepair, and if it is found to contain serious category 1 hazards, the local authority has a duty to take action to address them. If the property owner does not comply with an improvement notice, they will be guilty of a criminal offence that carries a fine of up to £5,000. Where there is an immediate risk, the authority can take emergency remedial action and recoup the costs.

[Graham Jones]

The Minister will be aware that local authorities do not have a duty to inspect properties, and do so only when there is a complaint, for instance, which in practice makes it an ineffective tool. What is the Minister going to do about that? Should there be a duty on local authorities to inspect houses for category 1 and category 2 hazards, or will we remain with the current system that does not achieve what it promises?

[Mr Foster]

The hon. Gentleman raises an interesting point to which—let me be honest—I have not previously given any thought. Now that the point has been raised, I assure him that I will consider it and write to him subsequently.

As the hon. Member for Newcastle upon Tyne Central has said, there are a number of other measures, including empty dwellings management orders. I do not want to go into great deal about those because I think that she and I might sit down and have a lengthier dialogue about some of the issues she has raised. However, since the introduction of those orders several years ago, only 69 have been issued. She will be aware that, in her local authority area in Newcastle, not one EDMO was issued until last month when the first one was proposed.

[Graham Jones]

Will the Minister give way?

[Mr Foster]

I will, but we need to make progress.

[Graham Jones]

Again, I ask the Minister to look into this issue, but I think few orders were issued because the properties involved often required £30,000 or £40,000 to be spent. Under the old legislation, that had to be recovered in the seven years of the EDMO. Councils could not afford to lay out capital investment upfront, and they had no expectation of recovery, especially in cluster areas where there was no market demand for the properties involved.

[Mr Foster]

On this occasion I do not need to go away and think about the hon. Gentleman’s point, and if he was listening to my earlier comments he will have heard me mention a number of funding streams that we have made available to ensure opportunities for the provision of support to bring properties back into use more quickly. One reason we changed the arrangements from six months to two years, as the hon. Lady said, is that we believe that provides the right balance between enforcement and the opportunity to work with owners and the available funding to bring properties back into use, without ultimately using the serious sanction of the order.

Time is short and I want to pick up on a couple of points raised by the hon. Lady. She raised the issue of houses in multiple occupation, and suggested that, in certain circumstances, people have received planning permission to convert a property—largely such properties have three or more storeys and five or more people—into an HMO. At times, however, that property is no longer used for multiple occupation and could be used for a family, but that does not happen because people are afraid of losing the planning permission if they subsequently wish to convert the house back into an HMO. I have had a very brief conversation with officials about that situation, but I clearly need to have more detailed conversations. That might not be the problem that the hon. Lady describes, but I give her an undertaking to look at the issue. If necessary, we will have further dialogue, but I certainly commit to writing to her.

We believe that article 4 directions and licensing are a powerful tool. The hon. Gentleman will be aware that article 4 directions and licensing can be used either for an area or for parts of it. The important point is that local councils have the opportunity to make the decisions that best suit their circumstances.

[Graham Jones]

I am grateful to the Minister for giving me the opportunity to make the point. The Minister’s assessment is right but, putting aside many other problems with licensing, there are no qualitative standards in licensing. It is about low demand and antisocial behaviour. It is not about individual properties, but about a neighbourhood. It therefore does not tackle the problem that my hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) has described.

[Mr Foster]

Another point to which it is worth drawing the House’s attention is on the valuable work of a number of housing associations that work to address a wide range of problems—they do not just let and manage properties.

The behaviour of letting agents was touched on. There are procedures to bring concerns about the behaviour of letting agents to the attention of relevant bodies within local authorities, but I recommend that people ensure they go with an agency that is in a safe letting scheme.

I thank the hon. Lady for introducing this important debate. As I said, I will continue to work with her. I share her passion for getting empty properties back into use. That will provide much needed additional houses, but it can also remove the blight on communities that, sadly, currently exists. I congratulate her on securing this debate.

Question put and agreed to.