An issue which president-elect Andy Burnham is going to have to grapple with is fixing Britain’s housing crisis. I’m sorry Andy but it’s not as simple as imposing rent controls. That is not the answer. It is the old issue of supply and demand. But supposing there is a way of increasing that supply by half a million homes overnight? It’s not going to solve Britain’s housing crisis. But it will certainly make a difference. I’ll show you how it can be done.
There are already around half a million homes standing empty in the UK which could help ease Britain’s housing crisis if only they could be brought back into beneficial use and occupation. I’m not talking about those properties standing empty because they are going through probate or which are on the market but have yet to find a buyer. No – I’m talking about those properties which are long-term empty and with no realistic prospective of ever being brought back into beneficial use and occupation. Many of those properties have been empty for so long that they are no longer fit for human habitation without expensive capital works to put them back into repair. So what can be done?
Statutory powers already exist to enable councils to take over long-term empty properties and bring them back into beneficial occupation and use. These include the empty dwelling management orders (EDMOs) introduced by the Brown government and contained in the Housing Act 2004 as well as the powers which Local Housing Authorities have under Section 17 of the Housing Act 1985 to compulsory acquire empty properties to bring them back into use. So how many EDMOs have actually been made in the past 20 years? Take a guess!
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Yes really! I don’t have any figures for single property CPOs. But I’m guessing that it ain’t many. The problem is that these procedures are cumbersome and expensive to be of any practical use by local authorities. At a guess I would say it would cost between £10K and £50K to cover the investigatory and legal processes as well as additional costs of making the property fit for occupation. And the council don’t even own the property. CPO is even more expensive with the prospective cost of fighting a public inquiry if the owner objects. So budget for at least £50,000. And that doesn’t even include the cost of acquiring the property together with the additional owner-entitlements including statutory basic loss and disturbance payments. We need something simpler. Something that does not require massive upfront investment on the part of the local authority before they can even take control of the property and bring it up the standard. What we need is a simple power of sale, which enables a local housing authority to take possession of an empty property and put it on the market. Such powers already enable housing authorities to force the sale of an empty property to pay for a council tax debt or any environmental costs which can be charged against the property. But that can only work if there is an outstanding debt. All that the owner has to do is to pay off that debt to make the threat of repossession fall away. What is needed instead is a general ‘power of sale’, which would enable the local authority to take over the property and put it into auction. If capital works are required to make the property habitable, the terms of sale will need to ensure that the incoming purchaser is under an obligation to carry out works to bring the property back into beneficial occupation and use. As an added bonus, there will be no cost to the public purse, as the scheme will be entirely self-financing, with all administrative and legal fees being taken out of the proceeds of sale. Is it really that simple? Doesn’t there also have to be a process? Here is what I propose.
Where it becomes apparent that a property has fallen long-term empty without any realistic prospect of it being brought into beneficial occupation or use without local authority intervention, notice should be served on the registered or reputed owner of the property giving them an opportunity to explain why the property is empty and their proposals to bring it back into beneficial occupational and use. Having considered any owner-response, the local authority will then decide whether to issue a legal document giving itself a statutory power of sale against which the owner will have a 21-day opportunity to appeal to a magistrate’s court. Once the power of sale is confirmed, the authority can then immediately re-secure the property and put it in for auction. If major capital works are required to put the property into a habitable condition, this will have to be made clear in the sale-conditions and responsibility placed on the contract purchaser to put the property back into repair and bring it into beneficial occupation and use. The local authority will then handle the sale and the balance of the sale proceeds, after redemption of any prior mortgage and having taken out the cost of the process, will be placed into a separate deposit account to the credit of the former owner. Do you think it would work? Let’s at least give it a try.
