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					January

2008
THE EMPTY HOMES AGENCY

Monthly News Bulletin

Empty Homes Agency, Downstream Building, 1 London Bridge, London, SE1 9BG Tel: 020 7022 1870 Email: shashi@emptyhomes.com Statements in this newsletter are for guidance only and the Empty Homes Agency will not accept liability for losses resulting from reliance on them. Professional advice should always be obtained.

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A Word…. Are you en expert o EDMO’s Deadline looms for Housing and Planning Delivery Grant New National Indicators Public support for Halifax call for action on empty homes News Events

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A Word…
David Ireland, Chief Executive
There is an old adage that when the US sneezes the world catches a cold. If so the UK housing market could be in for a rough ride this year. Over the last few months we have heard much about the subprime mortgage lending and its impact on the US economy. The American Dialect Society even voted “subprime” the word of the year for 2007. This alarming graph courtesy of Market Watch inc. shows another aspect of that impact.

As borrowers default on their mortgages more and more properties are repossessed and as the housing market slows less properties are bought and rented. The result is a record number of empty homes. In fact this graph under represents the situation because it only shows owner-occupied homes (or should that be owner unoccupied homes?). The bare facts are that out of a total of 127.3 million homes in the United States, 17.6 million are empty. One in Seven! If only the US sneeze causes only the mildest housing market cold viruses to waft over the Atlantic, my prediction is that we are likely to see a rise in the number of empty homes in 2008. If we haven’t caught a cold yet, all the signs are that we are beginning to at least get a runny nose. The buy to leave phenomenon or “warehousing” as they call it in the United Sates is a problem that arose in the United States first. Repossessions in the UK according to the Council for Mortgage Lenders are up 30%. We should know more when we see the annual housing statistics published by DCLG. These are always published in mid December and

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although already 9 months out of date when they are published they are the best data we have about the numbers of empty homes. This year they are late. We don’t read anything into the delay but it we are awaiting them with interest. Whatever is in store for us in 2008 we already know what we need to do to deal with the consequences. 2007 saw several important moves by the government to encourage owners to bring empty homes back into use. Changes to VAT were introduced on 1st January, and the government is considering the options for removing council tax discount on empty homes. It has also agreed to consider introducing empty homes into the Housing and Planning Delivery Grant although as you will see below not exactly in the way we suggested. The government has begun to make the right noises about empty homes, but we think it is vital that it actually takes action and introduces measures that will help.

My apologies for the late arrival of the newsletter this month; and to everybody who tried to contact us over Christmas. Our Internet Service Provider (who will remain nameless for fear of defamation) switched us off in error. We are now back on-line and emails are working again. I hope you all have a very happy and successful 2008 David Ireland Chief Executive Empty Homes Agency Tel: 020 7022 1867 Email: david.ireland@emptyhomes.com

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Are you an expert on EDMO’s?
Or just thinking about using EDMOs but want to know more before you take the plunge? Either way, we’d like to hear from you. Empty Dwelling Management Orders were introduced by the Housing Act 2004 but take-up has been very patchy so far. While some local authorities have enthusiastically embraced them, others remain unconvinced. In collaboration with Shelter and LACORS, the EHA is putting together a guide to EDMOs. The basic law and procedures are fairly clear, so the emphasis of our guide is on the lessons to be learnt from practical experience of EDMOs so far and key points to guide good practice. We’ll be contacting some individuals we know about direct over the next few weeks, but if you have any suggestions for the guide please let us know. It might be specific advice to others on how to avoid a pitfall you have experienced, or a question or need you would like the guide to answer.

Contact Henry Oliver, Policy Advisor: Tel.: 020 7022 1869 E-mail: henry.oliver@emptyhomes.com

(the sooner the better: we hope to produce the guide by the summer!)

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Deadline looms for Housing and Planning Delivery Grant
Last chance to have your say! – Thursday 17th January is the deadline for responses to the Government’s consultation on Housing and Planning Delivery Grant. In our submission, the EHA will be arguing strongly for the proposals to be strengthened so that action on empty homes is a prerequisite for local authorities to be eligible for grant. It’s important that as many people as possible respond and tell the Government that empty homes should be a key part of its housing supply agenda. If you want to respond but are short of time, see the Crunch Time? piece on pp. 10-12 of the December bulletin for the key points we’ll be making or contact:

Henry Oliver Tel.: 020 7022 1869 E-mail: henry.oliver@emptyhomes.com.

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New National Indicators
Henry Oliver
Just before Christmas, we responded to the Government’s consultation on the National Indicators that are due to succeed the Best Value Performance Indicators. The abolition of BVPIs will see the disappearance of the indicator on empty homes, BVPI 64. We criticised the omission of any mention of empty homes from the new NI definitions, and highlighted the danger that this could encourage hard-pressed local authorities to reduce or even cease their work to tackle the scandal of empty homes. We also drew attention to the contrast between such an outcome and the emphasis in recent Government statements - the Pre-Budget Report/Comprehensive Spending Review, the Housing Green Paper and the Housing and Planning Delivery Grant consultation - on the importance of action on empty homes. Specifically, we argued for the Technical Definition of NI 154 on the supply of housing to be amended to include properties empty for more than six months brought back into occupation. There are close connections between this and the consultation on Housing and Planning Delivery Grant (see separate piece in this bulletin).

Contact Henry Oliver, Policy Advisor: Tel.: 020 7022 1869 E-mail: henry.oliver@emptyhomes.com

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Public support for Halifax call for action on empty homes
Halifax Press Release
Two thirds of people believe the government needs to do more to combat the problem of empty homes Halifax recently revealed the true extent of the problem of empty homes in the UK and announced that one in four people have lived on the same street as an empty home. Reduced property value (22%) and enjoyment of the street (22%), as well as the number of potential buyers (25%), are just a few of the negative impacts cited by affected homeowners. In response to the findings, Halifax called for further action on empty homes. The largest mortgage lender can now reveal the public support behind its call for action. Public firmly behind Halifax call to action Two thirds of people believe the government needs to do more. There is a strong feeling amongst the public (64% of respondents) that the government needs to do more to combat the issue of empty homes. A quarter (25%) believe that existing tax benefits should only apply if the owner makes the property their primary residence OR sells the property within 12 months. Halifax called for VAT and Council tax benefits to apply for 12 months for those people who took on an empty home and either made it their primary residence or sold it within this time. This is to encourage houses to be re-introduced into the housing stock. Less than one in ten believe the discounts should apply regardless of the owner's plans for the property as they currently do. The majority of people (69%) believe the council tax discount should be up to 50%. Local authorities currently adopt various approaches to council tax reductions for empty homes. Halifax called for a unified approach of a discount of up to 50% to apply for 12 months only. The public supports this call. Halifax call for further action against empty houses…….Halifax emphasises its call to action to the government to encourage and reward the renovation of empty houses.

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1. Halifax calls on the government to extend the reduced 5% rate of VAT for restoring an empty home to all properties vacant for more than 6 months, not just properties vacant for more than 2 years. This will provide a more level playing field between individuals and local authorities. Typically, local authorities do not pay VAT on renovation activities. 2. Local authorities adopt various approaches to council tax reductions for empty homes. Halifax calls for a unified approach. Buyers of empty homes will receive up to a 50% discount for a maximum 12 month period, up to six months of which can be after renovations are complete. This will encourage people who take on an empty home to re-introduce them into the housing stock within a 12 month period.

Halifax proposes that the above discounts will only apply if the owner makes the property their primary residency, finds a lodger, OR sells the property within a 12 month period. Jaedon Green, head of mortgage sales at Halifax, commented: "It's great to see that the public is behind our campaign to bring empty homes back into the housing stock. Halifax calls on the government to extend existing VAT and Council tax discounts to encourage the renovation of empty houses, thus making them homes". EDITORS' NOTES  For more information on Halifax's research into empty homes contact Carol Wright on 01422 333416 or carolwright@halifax.co.uk  Further Halifax research on empty homes can be found on its website – www.hbosplc.com  * Research undertaken by GfK NOP on behalf of Halifax. A representative sample of 959 adults were interviewed by telephone, during the month of November 2007. Definition of an empty home An empty home is classified as a dwelling, which has been vacant for more than six months either because it is between occupants, undergoing modernisation, in disrepair or awaiting demolition. A vacant public dwelling is classified as one which is empty for any length of time. Data on publicly owned dwellings which have been vacant more than six months is not available. Data on empty homes in England has been sourced from the "Housing and Investment Programme: Housing Strategy Statistical Appendix 2006" by the Department for Communities and Local Government. The number of English empty homes is measured as at April 2006. VAT on Empty Homes  17.5% VAT is payable for renovating an empty home vacant for less than 2 years.  5% VAT is payable for renovating an empty home vacant for more than 2 years.  No VAT is payable on renovation of a property vacant more than 10 years, which is renovated and then sold.  5% VAT is payable for restoring and subdividing an empty home vacant for less than 10 years. An extension of the VAT discount for renovating empty homes vacant for more than 2 years to more than 3 years was announcement in the 2007 pre-budget report.

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Empty Property News
+++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ EMPTY SHOP 'TAX' WILL HELP TO REVIVE TOWNS - 7th January 2007 South Devon Herald Express - Torquay,England,UK The Government ended its empty property relief tax system in a bid to drive down rent and encourage business growth. In cities like Manchester, ... +++++++++++++++++++++++++++++++++++++++++++++++++++++++++++ New VAT rules to help renovators restore vacant properties CityWire.co.uk - London,England,UK New rules for VAT on property renovations will encourage owners and developers to get on with restoring empty properties rather than leaving them to rot. ... +++++++++++++++++++++++++++++++++++++++++++++++ Homes sell-off to raise repair cash - 19th December 2007 Islington Gazette - London,England,UK This included scaling down some refurbishment plans and selling up to 500 empty homes. Residents have since been consulted and last Wednesday's meeting was ... +++++++++++++++++++++++++++++++++++++++++++++++

For more latest news please visit us: http://www.emptyhomes.com/aboutus/latestnews/latest_news.html

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Events
Event: Tower Hamlets Landlord Forum Date: 30th January 2008 For more details please contact Jamie Jackson: Jamie Jackson on 020 7364 3558 Event: Low Carbon Social Housing Conference - Physical, Economic and Social Revival of Local Communities Date: 21st January 2008 Hear the latest policy guidance from CLG including the Code for Sustainable Homes and its role in promoting long term sustainable development Learn from examples of using new technology in existing housing stock and assessing the costs and benefits of retrofitting Hear the latest from the CLG Select Committee Enquiry into climate change and existing housing stock For more details please call: George Krousti on 0207 808 5315

* * * * * * * * * * * * * For more info please look at our website: http://www.emptyhomes.com/aboutus/events.html

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