Tiffany Cloynes 23 October 2018

Making use of empty homes

In many areas demand for housing is high and local authorities are under pressure to meet their responsibilities but there are also many empty homes.

The situation has prompted the deputy leader of the Royal Borough of Kensington and Chelsea to call for a change in the law to give local authorities more access to homes that are not being used.

Local authorities currently have power to control the use of empty homes by applying to a residential property for an empty dwelling management order under the Housing Act 2004. However, this is only possible if a residential property in private ownership has been empty for at least two years and has been causing a nuisance for the community.

There is also a requirement for a local authority to obtain an interim order which can last for up to twelve months. During that time, the local authority must work with the owner to try to agree a way to bring the property back into use. If no agreement is reached during this time, the local authority may make a final order, which can last for up to seven years. With a final order, the local authority may find a tenant without obtaining the owner’s permission.

The proposals from Kensington and Chelsea are that the requirement for homes to be causing a nuisance should be relaxed, that local authorities should be able to levy a management fee and that owners should benefit from a favourable taxation scheme on the income provided to them by tenants via managing local authorities if they allow local authorities to let their properties.

The changes proposed by Kensington and Chelsea might lead to an increase in empty dwelling management orders and so could help to reduce the number of empty homes. In a letter to the housing minister, the council’s deputy leader has said that there are 621 properties in the borough that have been empty and unfurnished for more than two years.

However, some people are opposed to the principle of local authorities having the right to make empty dwelling management orders at all, arguing that this is an attack on the civil liberties of property owners. Such critics might see any lessening in the criteria for the orders as further weakening property owners’ rights.

The use of a favourable tax scheme might have a deterrent effect on property owners who might have sold their properties or made them available for rent even without such incentives. The prospect of a favourable tax position might encourage such owners to wait and to allow their local authorities to let their properties, so leading to a delay in housing being made available and extra administration for local authorities in letting houses which might have come to the market even without their intervention.

Also, whilst local authorities might find it helpful to have access to a greater number of dwellings, they might incur costs in taking possession of properties and taking any action necessary to make them fit for tenants to inhabit. They can recover their costs from the rent received from tenants but they need to have the funds to pay them in the first place. This might be challenging for local authorities who already deal with intense pressure on their resources.

There needs to be a range of action to address housing needs. For example, the Government’s decision to remove the Housing Revenue Account borrowing cap could lead to local authorities being involved in building more homes.

A change in the law on empty dwelling management orders could have a role to play in a range of actions but the potential practical implications of such a change need to be recognised.

Tiffany Cloynes is a partner at Geldards

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