Empty Homes (Hyndburn)

– in Westminster Hall at 1:30 pm on 13th December 2011.

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Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons) 1:30 pm, 13th December 2011

It is a pleasure to serve under your chairmanship, Ms Osborne—for the first time, I think. It is also an honour to have secured this Adjournment debate on empty homes in Hyndburn, an issue close to my heart and a huge problem in my constituency. The debate is very welcome, after the recent launch of the Government’s housing strategy, with much surrounding national publicity.

The causes of empty homes and the issues and problems connected with them are complex and vary around the country. In Hyndburn and other parts of Pennine Lancashire, the biggest factors are over-supply and low demand. Hyndburn has a total housing stock of 36,447, but there are only 34,201 resident households in the borough. Simply put, we have more residential dwellings than households that require homes. Most up-to-date figures indicate that we have 2,546 vacant dwellings—nearly 7% of the total housing stock—of which 1,579 are long-term empties. Vacant housing is therefore almost inevitable, as we do not have a housing shortage.

The causes and solutions go beyond housing. We need support for growth, which will stimulate the local economy. We need to boost the local gross domestic product. Our housing offer needs to support the growth agenda, so we need to provide greater choice and flexibility, as well as affordable homes. Unfortunately, choice is limited in Hyndburn, and more than 50% of our housing stock is terraced, most of it with two bedrooms. There is nothing wrong with terraced housing—I live in a terraced house—but we need to modernise and improve those houses; otherwise we will not retain households or attract new ones. In fact, demand for new housing only exaggerates the problem of the older stock.

Demand and modernisation are the focus in dealing with empty homes in Hyndburn. Nearly half the vacant homes are in neighbourhoods surrounding the centre of Accrington and most are pre-1919 two-bedroom—as we would expect—terraced houses, many of which are in serious disrepair; the climate is of course damp, and private landlord activity is significant, at around 30% of overall tenure. We currently have 1,310 people in need on the housing register, mainly because of inappropriate housing and related poor conditions. The reasons for homes being vacant vary, and in Hyndburn the reasons are certainly different from those described by Jason McCartney, when he raised the matter of empty homes in the House on 29 November. Our problem is not overdevelopment, but over-supply and a lack of choice.

High concentrations of long-term vacant dwellings blight our neighbourhoods and the solution that is needed is a long-term, comprehensive approach to regeneration. Although the housing market renewal programme was not perfect, it was as close as we have come to a comprehensive approach. The ending of the programme has left a legacy, and community expectations remain. The recent award of £2.3 million transitional funding allows us to meet our remaining legal obligations, as well as to relocate a number of households that are trapped in potential clearance areas. However, low demand has not gone away and there is a continuing need to regenerate some of Hyndburn’s neighbourhoods that were never included in the HMR programme.

I welcome Government support for new house building, but I am seriously concerned that elements of it will not work in areas of low housing demand. Government housing policy remains driven by the south, ignoring the nuances of the housing problems in northern towns. Greater flexibility is required. Regeneration is a long-term, comprehensive process, which is aimed at tackling social, economic, physical and environmental issues in places where the market has simply failed. There is a risk that the remaining resources will go to growth areas, rather than to help more deprived areas, and that that will exacerbate the problem. I understand that value for money is important, but I ask the Government to identify, or top-slice, funding to assist growth in less affluent areas, such as Haslingden and Hyndburn. That would at least give more deprived areas a competitive chance, as well as supporting economic growth.

I understand that the second tranche of the £50 million for low-demand areas must be match funded. That is a significant problem. I must advise the Minister that that is nigh on impossible in Hyndburn, so his policy will disadvantage Hyndburn in comparison with larger local authorities with greater access to resources. As a small district authority, Hyndburn receives only 15% of the council tax that is collected. Lancashire, the shire authority, has no interest in empty homes. Hyndburn has already matched funded the transitional grant from HMR, to the tune of £2.3 million. It no longer receives capital funding, with the end of the Government’s support for a housing capital fund.

As I have previously pointed out in the House, the new homes bonus is insignificant in Hyndburn. The amounts have been residual and small, and new house building only exacerbates the problem of over-supply, because it disadvantages areas of low demand. In short, Hyndburn has run out of available resources with which to generate match funding. The local authority’s budget is due to diminish from some £17 million to about £11 million in 2014. Unfortunately, the funding will not be anywhere near enough to address the 300,000-plus long-term empty homes across the country.

On 29 November in the House, I expressed my shock that local authorities cannot bid for the empty homes fund, and the Under-Secretary of State for Communities and Local Government, Andrew Stunell, advised me that that was not the case, as reported at column 915 of that day’s Hansard. I have now had the opportunity to review the guidance for the £100 million fund, and it is clear to me that only registered providers and community and voluntary groups can apply—not local authorities such as Hyndburn, which are not registered social providers. I welcome the support for community and voluntary groups, but otherwise limiting the funding just to registered providers is a missed opportunity in an area with a significant problem. Allocating funds to local authorities would have provided more flexibility and innovation.

In addition, the guidance for the £100 million does not allow bids for vacant dwellings in council ownership. That is another missed opportunity. Hyndburn council owns long-term vacant houses not because it is a landlord, but because it is a former housing market renewal pathfinder. Allowing the former pathfinder local authorities to use the funding in partnership with others, including registered providers, would allow greater flexibly in addressing some of those depressing images that Channel 4 recently highlighted in the former HMR areas, and there would be viable alternatives to demolition, which is what I believe the Government want to encourage. I therefore hope that when the Government draft their guidance for the £50 million for empty homes in low-demand areas, they will bear my comments in mind: more freedom and flexibility, led by local authorities, will achieve more innovation and better value for money. Unless I am mistaken, that is the Government’s objective.

I am led to believe that bids for empty homes funding will be made from at least one registered provider in Hyndburn and from the local authority if the second tranche of funding permits. Our priority area is known as Woodnook and has nearly 350 vacant homes, with ownership in both the private and public sectors. I am pleased to inform the Minister that we are working with a private sector partner to bring in £7 million of investment to convert and refurbish 89 long-term vacant homes—many of which have been vacant for two years—without public sector funding. However, I hope that the Department for Communities and Local Government will look favourably on applications from our partners to extend the innovative work that we are doing to more vacant homes in this neighbourhood, as well as elsewhere in the borough.

I have on several occasions in the past raised the issues and problems caused by some landlords in Hyndburn; I find it necessary to do so again in relation to empty properties. Unfortunately, private landlords contribute directly to the problem of empty homes and of low housing demand through poor standards of management and maintenance. When I requested the information, I was told that slightly more than 80% of the empty properties are in the hands of private landlords. Although I acknowledge that legislation exists to introduce selective licensing in areas of low demand, the measures required to introduce a licensing scheme are onerous and potentially costly to the public purse, as Hyndburn found, regrettably, to its cost, having had to fork out £100,000 in a lost case in the High Court during—I must add—the previous Administration.

The Government’s new housing strategy quite rightly acknowledges the private rented sector’s essential role in the housing market. However, I would welcome a commitment from the Government to hold an independent review, to try to improve standards in the private rented sector and to relax the bureaucracy that currently exists when seeking to establish a selective licensing designation. I understand that the council is considering a new licensing designation, but the potential for a legal challenge and subsequent cost may be a deterrent. If the rules and guidance were simplified and made more transparent, thus making such a designation easier, more local authorities would be encouraged to consider using the power.

I welcome the consultation on an empty homes premium on council tax, payable on homes that have been left empty for more than two years. I fully support the initiative, but I ask that in two-tier authorities—this problem keeps coming back—district councils retain the premium, as that is where the burden to council tax payers currently exists.

Photo of Jason McCartney Jason McCartney Conservative, Colne Valley

I congratulate the hon. Gentleman on securing this debate, thus building on the progress made in my Adjournment debate, to which he contributed, and keeping empty homes well and truly on the agenda. I also thank the Minister for attending.

I particularly appreciate the way in which the hon. Gentleman has progressed the arguments. He has considered cases in his constituency and identified that the question, which also applies to my constituency, is about overdevelopment on green fields and about bringing rural properties back into use. I welcome the cross-party approach on the issue and praise the Minister for the way in which the Government have reacted.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

There is some consensus that the problem needs tackling. There are variances, particularly between the north and the south—between under-supply of housing in the south and over-supply in the north. There are also complexities regarding low demand. The hon. Gentleman, who has a constituency not far from mine that has some of the problems, is quite right in saying that there is some sort of a cross-party consensus, but there is a difference between certain areas in tackling empty homes.

I end my contribution by expressing a sense of disappointment and frustration that the Government’s housing policy is driven from the south and that they seem unwilling or unable to see the disjuncture between their strategy and the realities of places such as Hyndburn—my constituency—and Haslingden.

Photo of Andrew Stunell Andrew Stunell The Parliamentary Under-Secretary for Communities and Local Government 1:43 pm, 13th December 2011

I congratulate Graham Jones on bringing the matter back to the House. As he says, it is crucial, and I personally and the Department take it seriously. It is set out in some considerable detail in the housing strategy document that we published a fortnight ago. There is quite a lot of common cause between the hon. Gentleman’s intentions, those of my hon. Friend Jason McCartney and mine.

The first point to acknowledge is that there is not one housing market in England—there are not even 10. In fact, if I look at my own borough of Stockport, I would say that there are 10 different markets, even in Stockport.

Photo of Andrew Stunell Andrew Stunell The Parliamentary Under-Secretary for Communities and Local Government

The hon. Gentleman acknowledges that. In every square mile, some bits are seen to be more desirable than others and accommodation is more popular. That is not a function of the private market alone; it is also true of social housing, where estates are seen to be desirable, undesirable or less desirable. Therefore, we cannot have a one-policy-fits-all solution, and I think that we have common cause on that. I want to assure him that, as a fellow north-western MP, I am well aware of the market’s complexity and the differences even between places that are adjacent to one another.

I agree with the hon. Gentleman’s starting contention that the way out of the current problems faced by Hyndburn and other similar communities is to get the economy going again and ensure that we have growth and investment in industry and jobs. I am sure that he is aware of the Chancellor’s autumn statement and the huge emphasis that the Government place on securing those outcomes. He will also be aware of the Government’s central task, which is to bring our finances and our economy back into balance, so that growth can be based on secure foundations.

I think that we also agree that, when people need homes, the fact that we have empty homes is a scandal. I accept the hon. Gentleman’s point that his district has 36,000 homes and only 34,000 households to fill them. That makes his area distinctive, although not unique—certainly not in the north-west.

At the latest count, there were 720,000 empty properties across England, which was down by 17,000 from the past year. Around 279,000 of those are long-term empties, which are properties that have been empty for longer than six months. The number of long-term empties has fallen by a larger number—some 21,000—since 2010. That is the biggest year-on-year decrease since 2004. I am pleased to report those figures to the House.

According to the figures supplied by Hyndburn, it currently has 2,547 empty properties, which is a rise of 101 since 2010. It has 1,160 long-term empty homes, which is a reduction on the previous year—31 homes were brought back into use, for which the borough gets a new homes bonus.

The hon. Gentleman pointed out that empty homes can rapidly fall into disrepair. They can attract antisocial behaviour and certainly do not enhance the general environment of the neighbourhood. We need to make better use of them. That is why our housing strategy sets out a strategy for empty homes.

I have already mentioned the new homes bonus, which has now been running for two years. In the first year, the decrease in the number of long-term empty homes was just over 15,000. That produced a reward for local authorities of almost £19 million.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

The Minister makes a good point, and I am not going to decry it. The issue in Hyndburn is that we cannot build and we do not have households. It is understandable how the new homes bonus was £67,000 last year and £53,000 this year—we are now into the second year of the £67,000. It is difficult, and I hope that the Minister will address the problem of how we match fund when there is no money; we have found the last £2.3 million that we had at the bottom of the barrel.

Photo of Andrew Stunell Andrew Stunell The Parliamentary Under-Secretary for Communities and Local Government

I hope to develop that point in the remainder of my remarks. The new homes bonus year goes from October to September. In the first 12 months, £19 million was paid out in new homes bonus to local authorities for bringing empty homes back into use. I accept that the figure was modest for Hyndburn borough. It had a net decrease of six empty homes and was paid £12,537 as a result. In the second year, which ended this September, Hyndburn had a net decrease of 31 empty homes and will receive an additional £25,460. In total, because the scheme runs for six years, this year it will receive £37, 997. That is the existing mechanism in place.

The housing strategy added a £100 million fund to bring empty homes back into use as affordable housing. Housing associations and local authorities can apply via the Homes and Communities Agency. The bidding guidance for that was launched by the HCA on 21 November and the deadline for applications is 23 January 2012. The HCA bidding guidance sets out that the ultimate landlord of the property must be a registered provider of social housing. That point was made by the hon. Gentleman, both in his intervention in the debate the other day and again today. It is true that bids must come from a current registered provider or an organisation that intends to apply to become one.

I have some good news for the hon. Gentleman. Local authorities that are not currently registered providers—usually because they were housing authorities but have transferred their stock—can still access the funding. There are two routes by which they can do so, the first of which is by partnering a housing association that is a registered provider, as I set out in a letter that I sent yesterday to the hon. Gentleman, which I hope he has received. The second route is to become a registered provider itself.

Hyndburn borough council is not currently a registered provider. What does it need to do to become one and therefore become eligible to make a bid against the £100 million directly, rather than working through a partner? Under section 114A of the Housing and Regeneration Act 2008, all that it has to do is to notify the Tenant Services Authority by letter that it intends to become a provider of social housing, owing to a change in circumstances. In this case, the change in circumstances would involve gaining access to the empty homes funding allocated via the HCA. It does not need to fill in the application form on the TSA website or go through the full application process. It will simply be added to the register as a registered provider of social housing within a few days of notification of its intention to do so.

I strongly suggest to the hon. Gentleman that he may want to get on the phone straight after the debate to recommend to Hyndburn borough council that it does exactly that. It can then choose either route for accessing the money: either to bid in association with a registered provider, such as the housing association that is managing its housing stock, or to make a separate application to become a registered provider itself. I hope that that gives him the confidence that he needs that this scheme is open and accessible to his local authority.

The hon. Gentleman made a number of other points, including that the housing stock in Hyndburn is not of the right mix or quality. The empty homes strategy will not address that to a serious degree; other elements of the housing strategy will be helpful. We have in place a social and affordable home construction programme: 170,000 social and affordable homes are to be built by 2015. The affordable home model is providing new homes in every housing authority area in England, including Hyndburn. Again, those homes are being delivered through registered providers, and the hon. Gentleman might want to check with the HCA the nature of the bids that have been made and accepted by the HCA for his area.

We are, of course, continuing to fund a substantial decent homes programme to bring social housing stock up to standard. The hon. Gentleman did not specifically set out the case in Hyndburn, but the number of non-decent homes has been halved since the Government came to office 18 months ago. We have a substantial decent homes investment programme and have made substantial progress already. I apologise, Ms Osborne, I wish to correct that figure. We have reduced the number of non-decent homes it by 26% and are on course to halve it by the end of this Parliament. That involves more than £2 billion in investment, which shows not only earnest of intent but good news for Hyndburn.

The hon. Gentleman appealed to my better nature with regard to how the funding for the additional £50 million is to be set out. The fund was announced on 21 November and is designed to tackle some of the worst concentrations of empty homes in areas of low demand. I put it to him that that money is essentially targeted at areas such as Hyndburn. That is, of course, on top of the money that he referred to, to ensure that the worst excesses of the market renewal project are patched up in the areas of greatest need. The bid submitted by Hyndburn and other local authorities in east Lancashire was accepted in full by the Department.

The funding details for the additional £50 million have not yet been finalised. Further details will be announced shortly. There are key differences between the £100 million fund for social and affordable housing and the new £50 million fund. In particular, it will not be appropriate under the additional programme for all the homes to be brought back into use as affordable housing. The schemes are all backed by cash rewards through the new homes bonus. We have also made it clear that the £50 million fund will take into account the need to look at environmental and broader works in association with bringing homes back into use, not simply the refurbishment of the homes themselves.

The hon. Gentleman also drew attention to the plans that we are currently consulting on regarding the introduction of an empty homes premium, to be a strong encouragement to landlords and home owners to bring homes back on to the market or into productive use. That consultation is going on and I take the hon. Gentleman’s contribution to this debate as a response to that consultation in favour of the introduction of the empty homes premium. I would be even happier if he wrote formally to the Department to put that clearly on the record.

Photo of Graham Jones Graham Jones Opposition Assistant Whip (Commons)

I would be delighted to do that, but in the last few seconds, will the Minister address the fact that we have no match funding?

Photo of Andrew Stunell Andrew Stunell The Parliamentary Under-Secretary for Communities and Local Government

I listened carefully to the hon. Gentleman, but I do not wish to pre-empt anything that may be in the criteria for the £50 million. I will undertake to convey his view and the circumstances in Hyndburn to my right hon. Friend the Minister for Housing and Local Government, who is working on that.

Sitting adjourned without Question put (standing Order No. 10(11)).