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Empty Properties (Newcastle)

Volume 553: debated on Monday 12 November 2012

Motion made, and Question proposed, That this House do now adjourn.—(Nicky Morgan.)

I am delighted to have this opportunity to raise such an important issue with the Minister. This is the first chance that I have had to congratulate him on his new job, and I hope that we can work together constructively on this very important issue. This is an opportunity for him to reflect on it from a fresh perspective.

At my surgeries and in my postbag, week after week, housing is consistently the No. 1 issue that constituents bring to me. Every month I publish a constituency report, which includes casework. For example, October’s shows that my office dealt with 23 housing cases—more than those involving benefits, health or crime. Every case is unique and heart-breaking. One constituent desperately wants to move to be near his father, who is suffering from dementia. Another is ill in private rented accommodation that is in such bad condition that it is making her children ill. Another knows that he cannot afford to stay in his home when the Government implement their bedroom tax, and the stress is undermining his mental well-being.

Everyone needs a safe and affordable roof over their head. I am sure that the Minister is a regular visitor to my website. He will have seen that I have recently launched a housing campaign, aimed at improving the availability of affordable housing in Newcastle. We need to build new housing and improve our stock, but Newcastle also has a large student population that needs quality housing at a fair price.

The Minister will know that my right hon. Friend the Member for Newcastle upon Tyne East (Mr Brown) has voiced concerns regarding the near permanent installation of letting boards in parts of Newcastle. The council is seeking ways to address that. However, the particular issue that I am concerned with today is the number of empty homes in Newcastle. There are currently more than 3,770 of them. At least, those are the ones we know about, mainly from council tax returns; the real figure is no doubt higher. The council estimates that there are probably a further 1,000 that could be brought back into use, and 99% of empty homes in Newcastle are in the private sector.

Empty homes attract crime and antisocial behaviour. They reduce the value of surrounding properties, push rents up, and increase pressure on green-belt land. Often, they also attract vermin, such as rats, as several of Newcastle city council’s environmental officers know to their cost. One of Newcastle’s great local papers, the Evening Chronicle, has highlighted this issue a number of times.

Those problems are intensified when clusters develop, as they have in several areas of Newcastle, including Benwell and Cowgate in my constituency, and Byker in the constituency of my right hon. Friend the Member for Newcastle upon Tyne East. Empty homes also deprive people in need of homes. There are 4,430 people actively applying for housing in Newcastle, with many more on the waiting list. With just 1% of council housing stock empty, we need to build more homes, both social and private, and get as many empty homes back into use as possible.

Last year, Labour retook Newcastle city council from the Liberal Democrats. Since then, Labour councillors have set about tackling the challenge of empty homes in the city. The council and its partners—the housing management organisation, Your Homes Newcastle, and housing partnerships—have a very good record on bringing empty homes back into use. Last year, over 300 such properties were brought back into use through direct help from the council. For example, the council works with responsible landlords to help them get empties back into use, including offering training to hundreds of landlords next year on how they can make better use of their properties. The council also offers a rent deposit scheme and a private rental service to remove obstacles, and provides a highly focused lettings support service that can deliver higher standards for existing and future tenants.

That kind of effort is partly why Newcastle’s empty homes rate is below the national average, and one of the lowest of the “core cities” at just 3%. It is also why a French television crew recently came to Newcastle to look at the work that has been done and to learn from it. We have a certain “Je ne sais quoi”. As well as these and other schemes, the council has provided £500,000 to tackle the problem of empty properties. I was pleased to learn that the Government have made a commitment to match-fund that, as the Minister will doubtless mention.

For many of my constituents who are effectively homeless or inadequately housed that is not enough. We need more support from the Government. Unfortunately, there are still landlords with empty houses who are not prepared to work with the council and housing organisations, effectively preferring to see their properties go to rack and ruin. In those situations, the council has powers to issue empty dwellings management orders—EDMOs—and as a last resort, compulsory purchase orders, and Newcastle City council is fully prepared to use them to carry out its duties to the community.

Will my hon. Friend add to that list councils’ ability to introduce selective licensing? Does she think, like me, that selective licensing should be at the discretion of the local authority, which should be able to broaden it and roll it out across a whole borough, rather than just selected areas?

My hon. Friend makes a good point. The housing situation in many cities has been affected detrimentally by the number of houses in multiple occupancy, which I shall come on to in the case of Newcastle. Councils’ ability to manage the proliferation of HMOs, especially when they are concentrated in particular areas, is important if we are to ensure that the housing stock is adequate and diverse.

I should like to make it clear that I am not waging a campaign against private landlords, who perform a useful and desirable service. Many of them offer homes of extremely good quality that provide good value for money. Nor do I want to see councils repossessing houses at every turn. However, I do believe that landlords—social and private—have a responsibility to their community. Does the Minister agree that property ownership comes with responsibilities as well as rights—a responsibility to the community in which the property is owned, and to the people of that community?

Housing associations tell me that landlords often prefer to convert their houses to houses in multiple occupation, and would rather leave these HMOs empty in the hope of eventually attracting tenants—often, in the case of Newcastle, student tenants—who will pay higher rents for the same square footage. I do not think that is responsible. Landlords say they are reluctant to let HMOs to families because they fear that they will never get the planning permission, sometimes necessary, to change the house back to HMO status, having let it to a family. Would the Minister look specifically into ways of addressing this barrier, perhaps by removing the HMO designation should houses sit empty for more than, say, one year?

The Government have fully committed themselves very publicly to localism and devolving powers to councils. Does the Minister support this? If so, could he explain to me why the Government are making it harder for councils to implement EDMOs? There is a statutory instrument currently before Parliament, No. 2625, which brings in a set of changes to EDMOs. From now on, councils will have to wait two years instead of the current six months before starting proceedings against private landlords. In addition, they will have to prove the social consequences of leaving the home empty. On the streets of Newcastle the social consequences of empty homes are all too evident.

Just on Friday the Minister for Housing was talking how about how his Department is acting to free councils to tackle homelessness—acting with only one hand, it seems, while the other hand takes these important powers away. Newcastle City council has made clear its opposition to the measure, passing a resolution against it. I hope the Minister will recognise the excellent work that Newcastle’s Labour council has done in reducing the number of empty homes in the city. But will he explain why the time limit for EDMOs is being extended by 300%? Will he explain why extra requirements have been added when the Government claim to believe that local authorities are best placed to make such decisions?

EDMOs were not being widely abused by councils. Used sensibly, in conjunction with incentives and schemes such as those run by the council and its partners in Newcastle, EDMOs are an important tool for reducing empty homes and homelessness. When I raised the issue at Communities and Local Government questions in March, I was told:

“The system for empty dwellings management orders remains in place and they can be brought into effect after two years, but there has been limited use of them so far.”—[Official Report, 12 March 2012; Vol. 542, c. 11.]

Could the Minister expand on that? Why, if he believes that there has been limited use, is he making it harder to use them? Their limited use is welcome and suggests that other measures are being used, but it does not follow from that there is no need for EDMOs or that the time limit should be extended. They are a last resort and an effective deterrent. That will no longer be so if the message goes out from Government that these orders will be much harder to implement in future.

When I raised the issue again at Communities and Local Government questions in April, the Minister’s predecessor said:

“It is not a very effective measure”,—[Official Report, 30 April 2012; Vol. 543, c. 1221.]

but councils disagree. Can he provide evidence for that statement?

I will not speak for too long, as I know that the Minister intends to give a considered response to each of my questions and I want to ensure that he has sufficient time to do so. I will finish by declaring a personal interest that perhaps I should have declared at the start of my speech. Social housing played a big part in my life. When my mother moved back to Newcastle in the ’60s with three small children, we spent six months living in my gran’s one-bedroom local authority bungalow before the council rehoused us in the home I grew up in. I am very grateful for that. As a family who could not afford to pay a market rent, having a safe and secure home available from the council made a huge difference and allowed us a decent start in life.

For the moment, we cannot build enough social housing fast enough to ensure that all those who need it can be properly housed, but we can do much more to encourage the private sector to meet the need for reasonably priced housing. Indeed, getting all the known empty private sector homes in Newcastle back into use affordably could reduce the number of applications for housing by up to 85%. I hope that the Minister will set out in his reply the Government’s position on the responsibilities that come with property ownership, how he will be empowering councils to tackle the problem of empty homes in their localities, why he is changing the EDMOs and whether he will look at the particular issue of empty HMOs.

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.

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

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.

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?

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.

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.

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.

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.

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.

House adjourned.