Empty Property Activity Report
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1 Empty Property Activity Report Salford City Council April 2014
2 Contents page 1.0 Introduction Background 1.2 Salford City Council 2.0 Achievements of the Empty Property Team The invest to save target 2.2 Council Tax Income 2.3 New Homes Bonus 2.4 Performance against other authorities 2.5 Empty Homes funding award 3.0 Prioritisation of work Actions and interventions 4.0 Innovation Cluster funding 4.2 Leasing Scheme 4.3 Regeneration joint working 4.4 Empty Homes Loan fund 4.5 Empty Property debt recovery of Council Tax 4.6 Information Handling 5.0 Challenges Delivery of external funding outputs 5.2 Empty Property debt recovery of Council Tax 5.3 Fraud detection and Prevention 5.4 Long term empty properties 5.5 Stabilise the housing market 6.0 Conclusion...6
3 Empty Properties Report 1 Foreword I am pleased to present this report reviewing the work of the City Council and its partners in dealing with empty homes in the City up to the end of When the Council launched its Empty Property initiative in April 2011 with the establishment of the dedicated Empty Property Team it set a challenging and aspirational target of reducing the number of empty homes in the City by 2,500 by April 2014.* I am proud to be able to announce that this target has been met and exceeded. This achievement is a result of the partnerships, innovation and sustained focus detailed in this report. I would like to take this opportunity to recognise the hard work and dedication of all the council officers and external partners who have contributed to reaching this significant milestone. This report: Provides background to the issue of empty properties in Salford and the development of the Council s approach to dealing with them. Reviews the work undertaken to address empty properties, achievements delivered and the wider benefits to the City of this work. Highlights the innovation and partnership working that has been undertaken to deliver positive outcomes on the ground. Looks to the future and seeks to identify the opportunities and challenges that the City will need to address in the coming years both to continue to reduce the number of empty properties and to safeguard the progress made to date. While warmly welcoming the achievements delivered through the empty property initiative that are detailed in this report, it is important not to lose sight of the fact that empty properties continue to be a significant issue in Salford. Latest available figures show over 3,000 empty homes in the City of which more than 1,000 have been empty for more than 6 months. At the local level, individual properties cause concern to communities, while at the citywide level empty homes represent the waste of valuable housing resources that could be providing homes for families in need. So I would like to thank to all those who have been involved in this work so far and invite them and any other interested parties to support us in continuing to turn neglected empty properties into cared for homes for families. Councillor Gena Merrett Assistant Mayor for Housing and Environment *as recorded by Council Tax data.
4 Empty Properties Report 2 1. Introduction The impact empty homes have on surrounding properties and local communities continue to be a significant issue for Salford City Council, property owners, local residents and other stakeholders. Since April 2011 the work of the Empty Property Team has been the major focus of the Council s response to the issues and challenges associated with both reducing the number of empty properties in the city and mitigating their impact on communities and local housing markets. This report provides a background to the development of the team, details of achievements and innovation delivered to date and also outlines the challenges facing the Empty Property Team moving forwards. 1.1 Background Successive Governments have prioritised action to helping local people bring empty homes back into use as a sustainable way of increasing the local supply of housing; reducing the negative impact that neglected empty homes can have on communities. The housing market has been one of the biggest casualties of the global credit crunch and has prompted policy change which aims to try and rectify the situation by introducing a range of measures. The policy is to engage builders, investors and local councils to increase the housing supply of both new-builds and bringing empty homes back into use. Funding programmes to tackle empty homes were announced in the Governments housing strategy Laying the Foundations which was published in November Salford City Council Dealing effectively with long term and problematic empty homes is an established priority for Salford City Council, if left neglected such properties fall into disrepair and become a magnet for anti-social behaviour, fly tipping and vandalism. They are a wasted resource restricting the supply of homes to families in housing need in the city. Empty properties blight local communities and symbolise a failing housing market making it more difficult for residents to take pride in their areas. They reduce housing values and undermine confidence and regeneration work. This results in both direct and indirect costs to the individual, community and the council. The Empty Property Team was set up in April 2011 to focus interventions to reduce the number of empty homes across the city, working from a baseline figure that reported some 5,736 empty properties in the city as of September This represented 7.5% of private sector housing stock, somewhat higher than the regional average. A vacancy rate of 2% represents a healthy housing market.
5 Empty Properties Report 3 The Empty Property Team was created to: Develop and drive a clear corporate response to the issue of empty homes Lead on the development of new tools and interventions Lead on the use of statutory powers to deal with problem properties Monitor progress and evaluate the effectiveness of interventions Co-ordinate and facilitate action to deal with empty properties across the council Engage with delivery partners, local communities, property owners and other stakeholders 2. Achievements of the Empty Property Team 2.1 The invest to save target The Empty Property Team is located within Environment and Community Safety Directorate and is part of the Housing Market Support section. The team is made up of one Principal Officer and five Housing Market Support Officers. The work of the team is supported by a cross directorate Officer Working Group and is directed by the Corporate Empty Property Group chaired by the Deputy Director, Environment and Community Safety. The team was initially funded on an invest to save basis in response to a need to tackle the growing number of empty homes across the city in a strategic, co-ordinated manner. A series of challenging targets were set projecting a reduction in the number of empty homes across the city over a three year period. The targets were set against the council tax baseline figure at September 2010 for an overall reduction of 2500 properties recorded as vacant on Council Tax. The table below sets out annually the challenging targets against the baseline figure of 5736 empty homes. Target / Year 2011 / / / 2014 Reduction in the number of empty properties Reducing the number of empty homes also delivers: An increase in the effective housing supply in the city Reduced nuisance to local communities resulting from empty homes Additional income to the council through the New Homes Bonus Additional income to the council through council tax revenue Investment back into local communities and services
6 Empty Properties Report 4 Figure 1: Performance showing reduction in number of empty properties set against the target of 2500 properties across the city. The Empty Property Team rose to the challenge and has achieved the overall target of returning 2500 properties back into residential occupation. This is reflected in the number of properties recorded as vacant on Council Tax (based on a like for like comparison with the figure for September 2010). In light of this success funding for the Empty Property team has now been mainstreamed. 2.2 Council Tax Income In addition the team has generated significant Council Tax income due both to returning empty properties to use when discounts were available and due to the detection and prevention of fraud If it were assumed that half of the properties returned to use started paying full council tax, which is conservative, it would give a direct financial return in excess of 1,000,000. There are numerous other nondirect financial benefits as discussed in this report. Intelligence gathered from enforcement and pro-active work is shared with Customer and Support Services. Despite changes to Council Tax discounts, some exemptions are still open to abuse. An example is properties awarded a class F exemption (applying for probate) awarded 100% discount. Officers make regular visits to the local probate registry to check on properties and alerts Customer and Support Services of any where probate has been granted but the property is still in receipt of the exemption. This has a direct financial benefit. 2.3 New Homes Bonus Salford s performance in returning empty properties to occupation has also been reflected in the allocation awarded under the Government s New Homes Bonus Initiative. New Homes Bonus (NHB) was introduced in October 2010 as a grant paid to local councils for increasing the number of homes and their use.
7 Empty Properties Report 5 The Council Tax CTB1 return form evidences year on year the number of properties recorded as long term empty properties, calculating the net change in the number of empty properties. This value can be negative as well as positive and is used to calculate New Homes Bonus payments. Salford s NHB payment for 2012/13 was the 10th highest overall allocation in the country; analysis shows approx 80% of the award resulted from the reduction in the number of empty properties in the city. To April 2014 the allocation for the reduction in numbers of empty homes element of the payment has totalled over 7.4 million pounds of income received to date direct to Salford City Council. Payments will continue to be calculated annually until October 2015 with the final roll over payment due in April Forecast shows that Salford City Council has secured so far over 45 million over the full programme. 2.4 Performance against other authorities In 2012/13 Salford City Council achieved the highest New Homes Bonus payments related to progress in dealing with empty properties of all the Greater Manchester authorities, representing nearly one third of the Greater Manchester Combined Authority (GMCA) overall allocation, and the third highest such allocation in the country. Nationally there were only 14 authority areas that received more NHB monies that Salford, two of which were in the North. Salford also had the highest reduction in numbers of properties recorded as empty (New Homes Bonus Scheme grant determination 2013/14). Work carried out in Salford as part of the Empty Property Hotspot programme has consistently found approximately 20% levels of fraud or misreporting. This was exposed on pro-active visits made to properties receiving Council Tax discounts or exemptions. This level of misreporting and fraud found in Salford is consistent with the outcomes of similar work of GMCA authority partners. 2.5 Empty Homes Funding Award In 2010 the Government announced funding to be made available to assist local authorities to return empty properties back into occupation. Salford City Council formed part of the Greater Manchester bid and were successful in all three bidding rounds. The success of the bids for Homes and Communities Agency (HCA) and Department for Communities and Local Government (DCLG) empty homes funding was as a result of robust monitoring and the high level intelligence available. This information was used to map empty property profiles on Geographical Information Systems submitted in the bids. All funding must be spent by March 2015; Salford City Council s Empty
8 Empty Properties Report 6 Property team is now busy delivering this very challenging output. Delivery of the full programme will see an estimated 312 long term empty properties refurbished and returned back into affordable accommodation. The total funding secured totals in-excess of 4.5 million pounds and will fund a mixture of leasing schemes, match funded refurbishment and a separate element of purchase and repair. The leasing schemes are to be delivered in partnership with Salix Homes or City West Housing Trust who will take on the full management of the properties over the 5 year term of the lease. As part of the bid City West Housing Trust will also deliver 28 purchase and repair properties. These funding streams are detailed below: To deliver 52 leasing scheme properties in partnership with Salix Homes under Round 1 from Homes and Communities Agency (HCA) funding. To deliver 150 properties on a match funding basis for empty properties within the six clusters from Department for Communities and Local Government (DCLG) funding. To deliver 110 leasing scheme properties in partnership with City West Housing Trust under Round 2 including residential, flats over shops and conversion from commercial to residential from Homes and Communities Agency (HCA) funding. 3. Prioritisation of work Salford City Council s Empty Property team has focused its actions on privately owned empty properties; this tenure contains the largest number of long term empty homes causing the greatest concern. Short term vacancies are those that are empty for less than 6 months. As demand for housing has increased the number of properties remaining vacant for less than 6 months has reduced significantly. There are also other factors that have influenced the reduction in short term vacant properties, such as; Investigation by the Empty Property Team Data cleansing by the Empty Property Team and related fraud Increased in demand for private sector rented property Landlord Accreditation Scheme and Rental Bond Scheme referrals Recession and need for owners to pay the mortgage Reduction in Council Tax discounts for properties empty 6 months to properties empty 2 months. The empty property team provides assistance to owners of properties empty less than six months as intervention at an early stage challenges owners to look at their options. The longer a property is left empty the harder it becomes to get it re-occupied.
9 Empty Properties Report 7 Figure 2: Trend over time in number of properties vacant for less than six months On the other hand, properties vacant for over 5 years whilst smaller in number are often the cause of greatest concern. Just by virtue of being left empty and unmanaged for such a long duration they have a direct impact on the local community. Generally they display disrepair externally causing blight and often attract anti-social behaviour, fly-tipping and nuisance. The Empty Property Team prioritises properties empty in excess of 5 years for targeted intervention and follow up enforcement action where required. This has resulted in a positive reduction in the number of problematic long term empty properties; this area of work continues to be a priority for the team. Figure 3: Trend over time in number of properties vacant over five years As discussed the greatest number of vacant homes fall within the private sector. Privately owned properties are more likely to be vacant for extended periods, becoming a source of concern and subject of complaints from residents. This is partly due to the lack of direct influence and control that the local authority has on private property owners.
10 Empty Properties Report 8 Case Study This property had been empty over 10 years. During this period it fell into significant disrepair, becoming infested with pigeons. This impacted on the elderly neighbours. Through enforcement action the Council s Empty Property Team served an Enforcement Notice to remove the nuisance and ultimately acquired a Compulsory Purchase Order (CPO). The property has now been fully refurbished to a high standard. Tackling the issues not only brought the property back into use but also improved the quality of life for the neighbours. moving in. 3.1 Actions and interventions In order to ensure the greatest impact the team has sought to operate on an intelligence led basis and has carried out detailed analysis of all available data. Geographic analysis showed that although all wards in the city contained empty properties the spread was far from even across the city or even within individual wards with some local areas being more severely affected than others. The team has also worked to improve understanding of why properties become and remain empty so that interventions can be developed that address the underlying problems affecting the owners of empty properties. This has led to the development of a balanced programme of action that: Targets concentrations of empty properties Targets empty properties causing concern Work with owners to support them in bringing their properties back into use Makes full use of available enforcement powers where appropriate Varies action to reflect owner s circumstances Through a balanced programme of activity the team has also delivered: 28 Improvement Notices and Environmental Protection Act Notices 22 Notice of Entry warrants 268 Hotspot / Snap activity interventions 154 Empty Homes Round 1 and 2 & Cluster Programme delivery 188 Reduction in properties vacant over 5 years (60% reduction) 12 Compulsory Purchase Orders (CPO)
11 Empty Properties Report 9 Case study A family home that had been left empty for a number of years and in need of modernisation was causing disrepair to the neighbouring property. After failed consultation with the property owner an Environmental Protection Act (EPA)1990 notice was served on the absent owner to repair the roof, the Council enforced the work in default as the owner was non-compliant. Subsequently the owner contacted the Council s Empty Property Officer who explained the options available, the owner accessed Salford s empty property investors list and the property went on to be sold to investor. The investor fully renovated the property and it is now rented to a family. 4. Innovation 4.1 Cluster funding Salford City Council was awarded the highest allocation of Clusters of Empty Homes fund within Greater Manchester Combined Authority (GMCA). The fund is to tackle the worst concentrations of empty homes, it will see 150 empty properties refurbished and re-occupied. As a result of the high level of intelligence and data held by Salford City Council, profiling and mapping the data allowed us to demonstrate that the schemes meet the following criteria: A minimum of 100 homes brought back into use Delivery is within a distinct, compact area (ward or smaller) with over 10% of homes empty, and each cluster representing more than 25 empty homes Clear and demonstrable high level strategic fit and community support - as well as evidence of local authority commitment if the local authority is not the lead bidder In principle, commitment to providing 100% match funding This programme will be delivered by March The programme will invest 1.5 million in property improvements with a requirement for an owners contribution to match the grant investment, this is in addition to the 82 unfunded properties returned to use by other enforcement interventions.
12 Empty Properties Report 10 Case Study This property had stood empty and abandoned since 2008 blighting the local community in Swinton. It was sold by Urban Vision under licence, this attaches refurbishment conditions to the sale. The property has now been returned into occupation providing 21 flats available to local residents. The developer entered into tenancy nominations with Salford City Council as a requirement of assistance provided by the Empty Homes Fund. 4.2 Leasing Scheme Salford City Council is the leading authority within Greater Manchester Combined Authority (GMCA) delivering a property leasing scheme through the Affordable Homes Programme. The lease has been developed by our legal team and the scheme is being delivered in partnership with Salix Homes. Properties leased through this programme will be privately rented providing affordable rented homes. The properties will be made available to individuals or families from the housing waiting list at up to a maximum of 80% of market rent. This will see a minimum of 52 refurbished properties returned to the housing market for a maximum of 5 years. Case Study Empty since April 2005, this property has been brought back to life under the leasing scheme. It has been fully refurbished and let by Salix Homes to a local family at an affordable rent. Lack of funds had been the main reason for the owner not repairing the property; the Empty Homes fund provided the helping hand needed to turn the property around.
13 Empty Properties Report Regeneration joint working Case Study Salford City Council is also leading the way after securing funding from Round 2 empty homes funding. As well as tackling empty homes this additional bid round has an emphasis on the refurbishment of empty commercial and non-residential properties for affordable housing. Working closely with the City Council s Regeneration team the scheme delivers Building Front Grants alongside Repair and Lease grants to maximise benefits and achieve added best value. This provides new and refurbished affordable housing within the Liverpool Road corridor, with City West Housing Trust delivering a full property management service. The grant funding will support the creation of more affordable homes in the Liverpool Road corridor area of Salford. This example shows the refurbishment of a ground floor commercial unit with seperate residential accomodation above, visually also improving the street scene. 4.4 Empty Homes Loan fund The National Empty Homes Loans Fund (NEHLF) is a new loans fund launched in September It enables people to borrow the funds necessary to get empty homes back into use. A loan of up to 15,000 can be provided to owners of empty properties to help bring them back into affordable use. Salford City Council is a partner authority which allows owners of empty properties within Salford to apply for this loan. The secure loan has a fixed 5% interest rate, and will enable owners to renovate a property to the Decent Homes standard. The first application for a property in Little Hulton is currently being processed by the Fund. 4.5 Empty Property debt recovery of Council Tax The Empty Property Team s excellent working relationship with the City Council s Customer and Suppport Services has led to the introduction of a Pilot power of sale using Charging Orders secured on long term empty properties. This tool is used where significant council tax debt has accrued and the owner has not been responsive to other lines of action. This process may ultimately lead to a power of sale being granted by the court allowing the authority to sell the property and recover any debt from the proceeds. To date this has seen a number of property owners pay off the outstanding debt and three properties are proceeding to power of sale in court.
14 Empty Properties Report 12 Case Study Targeted action at this long term empty property has resulted in the property finally being refurbished and ready for occupation by the owner. This property has been empty since 2003 and an open case for the team. During this time it has fallen into disrepair, attracted fly tipping and pigeon infestation. The team has dealt with the various issues over the years through enforcement action. The owner is resident next door and has continually carried out the minimum works required in an attempt to halt all lines of enforcement. The Council Tax debt recovery process has encouraged the owner to refurbish the property, pay off a lump sum of 5000 council tax debt and set up a payment plan to clear the additional debt. 4.6 Information Handling Accurate information is key to all work that the Empty Property Team undertakes. Although partnership working with Customer and Support Services and other stakeholders is now well established there still remains much scope for improving information sharing by means of IT solutions. Any solutions developed to address emerging challenges around data handling need to ensure continuing compliance with relevant requirements around data security and privacy. Recent changes to the Council Tax regime which have reduced the value of discounts available to owner s of vacant properties may have an unintended consequence of reducing the number of properties reported to Council Tax as being empty as there is now a much lower financial incentive for owners to do so. 5. Challenges 5.1 Delivery of external funding outputs Despite making good progress there is still much to do. The City Council s Empty Property Team has a huge challenge in delivering the outputs required to achieve spend on the Empty Homes funding. Under the three funding rounds the team will need to return a total of 312 long term empty homes back in to use. In addition, this will secure in excess of 2 million private sector investment.
15 Empty Properties Report Empty Property debt recovery of Council Tax The Empty Property team will be taking forward a programme of properties that have accrued Council Tax debt in excess of 2,000. A task group has been established with Customer and Support Services and Legal Services to manage delivery of the programme. Using this process the Council s Empty Property Team aims to recover debt to achieve a budget saving of 250,000 during The team will also be analysing data on all properties with a debt in excess of Properties will be targeted in order of most significant debt, applying processes developed to seek to engage with owners to encourage them to take action but where this fails to make use of enforcement powers available. 5.3 Fraud detection and Prevention 5.4 Long term empty properties 6.Conclusion Experience to date has clearly demonstrated the value of joint working. By effectively using the data held by Council Tax the Empty Property Team has carried out detailed investigations of properties and has had significant success in identifying cases where owners are seeking to defraud the Council. This has had significant successes. Although, as discussed in this report, the Empty Property Team working together with partners has already delivered impressive reductions in the number of empty properties in the city, significant numbers of properties still remain empty. Even limiting ourselves to looking at properties that have been empty for more than 12 months, and are therefore unlikely to be returned to use without some form of intervention, there are still over 900 such properties in the City.The Empty Property Team will continue to focus its work to see properties brought back into use. Salford City Council s Empty Property Team will aim to continue to reduce and maintain the levels of empty homes across the city; to ensure a supply of good quality accommodation are returned back to the housing market; and where possible at affordable levels. This will be achieved by focused activity in the areas below: New Homes Bonus payment generation Round 1 and Round 2 grant funding Pilot order of sale through council tax debt recovery Second home enforcement action on council tax exemptions Enforcement action Improvement Notices / Suspended Improvement Notices Notice of entry warrants Compulsory Purchase Orders Empty dwelling Management Orders Dealing with Empty Properties and engaging owners is a lengthy and often frustrating process and requires dedicated resources. Enforcement tools available to the Council are also lengthy and require set processes, to be followed. The Empty Property Team will to continue to engage owners of empty properties and where possible seek amicable solutions resulting in empty homes being returned to the housing market.
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