Report author: Mark Ireland - Leeds

[Pages:4]Report author: Mark Ireland Tel: 39 57154

Report of Service Manager ? Private sector Housing, Housing Partnerships

Report to Director Decision Panel Date: 21st November 2013

Subject: A request to amend the availability to lend under the Leeds Empty Homes Loan Scheme

Are specific electoral Wards affected? If relevant, name(s) of Ward(s):

Yes

x No

Are there implications for equality and diversity and cohesion and integration?

Is the decision eligible for Call-In?

Does the report contain confidential or exempt information? If relevant, Access to Information Procedure Rule number: Appendix number:

Yes

x No

Yes

x No

Yes

x No

Summary of main issues

1. Reducing the number of empty homes is a top 10 priority for the Council. To address the issues the Executive Board agreed to provide additional funding in September 2012 to increase the work undertaken by the Council and partners to bring empty homes back into occupation.

2. In September 2013 the Director of Environment and Housing approved the creation of the Leeds City Council Empty Home Loan. The loan will be repayable after 5 years, secured as a first charge against the property and will be subject to the same interest rate as the equity loan scheme available to vulnerable home owners. At present this is 4.5%. The loan will be paid on completion of the works to ensure that the property is brought back into use. An administration charge will be charged as per the equity release loan offered to vulnerable owners to contribute towards the cost of the servicing the loan scheme.

3. A condition for the loan was that it would be a first charge on the property. However this would exclude those owners with current charge on the property but who would have significant equity available to secure a further charge.

4. It is proposed to alter the conditions of the loan to allow owners who already have a charge registered against their property to access a loan provided that there is sufficient equity available in the completed property. It is proposed to allow owners to access a loan regardless of current borrowing provided it does not exceed 70% of the

valuation of the property once it has been approved. These terms match the same offer to vulnerable owner/occupiers under the Council's Home Improvement Assistance Scheme.

Recommendations

5. It is recommended that the Director of Environment and Housing approves the change in condition for the Empty Homes Loan to allow owners who have current charges against their property to access funds; providing the borrowing does not exceed 70% of the valuation of the improved property.

1

Purpose of this report

1.1 The purpose of the report is to approve changes to the Leeds Empty Homes Loan scheme to allow owners with current borrowing against their property to access funds provided the total borrowing does not exceed 70% of the valuation for the improved property.

2

Background information

2.1 In September 2013 the Director of Environment and Housing approved the creation of Leeds City Council's Empty Homes Loan. Initially ?240k has been made available to provide loans to empty property owners where their properties have been empty for greater than 12 months. An owner is able to borrow up to ?30k against the improved value to the property. It was agreed that the borrowing was a first charge and that it must not exceed 70% of the improved valuation of the property. All loans will be repayable within 5 years of the certified date to allow the funds to be continually recycled.

3

Main issues

3.1 The Director of Environment and Housing approved the creation of Leeds City Council's Empty Home Loans in September 2013. That allowed empty home owners whose properties have been empty for greater than 12 months, to borrow up to ?30k where they had sufficient equity in the improved value provided it does not exceed 70% of this value. The approval allowed owners to borrow the funds provided it was a first charge.

3.2 Unfortunately by restricting the availability of funds to those who do not have an existing charge on their properties restricts the number of eligible empty homes owners who can access the scheme.

3.3 It is proposed to alter the conditions for owners to access the funds provided the overall charges on the property do not exceed 70% of the improved value. This will allow owners who already have a charge, such as a mortgage or secure loan to access funds to bring their home back into use. It will be a condition of the scheme that the Leeds Empty Home Loan is a first or subsequent charge against the property provided the overall charge do not exceed 70% of the improved value.

3.4

4 4.1 4.1.1 4.2 4.2.1

4.3 4.3.1 4.3.2

4.4 4.4.1

4.4.1 4.5 4.5.1

4.6 4.6.1

5

This change in the condition of the loan scheme will bring it into line with the Council's existing loan scheme under the Home Improvement Assistance for vulnerable owner/occupiers.

Corporate Considerations

Consultation and Engagement

The Empty Homes Loan has been discussed with the Executive Member, Senior Managers, and empty property owners.

Equality and Diversity / Cohesion and Integration

The project forms part of the Empty Homes Strategy 2012/5. An Equality, Diversity Cohesion and Integration Report has been produced for the overall Empty Homes Strategy and has been attached as part of the background documents

Council policies and City Priorities

Addressing the issue of empty homes is one of the Council's top 10 priorities.

The Council's progress in addressing empty homes is also monitored as part of the Housing and Regeneration Board's Action Plan. Quarterly performance reports are provided to the Board covering progress towards an annual target of returning 3200 long term empty homes back into occupation.

Resources and value for money

Resources for managing the Leeds Empty Homes Loan scheme are already available within Housing Partnerships. The existing Empty Homes and Home Improvement Team have the necessary skills, knowledge and experience to implement and manage the proposed scheme.

The change in the condition will increase the number of owner who can apply for funds, thereby contributing to bring empty homes back into use

Legal Implications, Access to Information and Call In

The proposed change is to the condition of any loan offered. The change has been discussed with Legal who has advised on the change. The report is not eligible for call in.

Risk Management

The new proposed change in conditions does not affect the risk to the repayment of the loan. It is not proposed to lend any greater amount against the property than previously agreed, namely 70% of the improved value. Loans will only be available where there is sufficient equity in the improved value and will still be paid on completion of the works.

Conclusions

5.1 In September 2013 the Director of Environment and Housing approved the creation of Leeds City Council's Empty Home Loan Scheme. The scheme allows owners to borrow up to ?30k against the improved value of their property. The scheme restricted the funds to those who do not currently have any charges against their property. This will restrict the number of empty homes owners who may be able to benefit from the scheme.

5.2 It is proposed to alter the condition for the loan to allow any empty property owner who already has a charge against their property to access the loan scheme, provided all charges against the property do not exceed 70% of the improved value. All loans will be secured as a first or subsequent charge. This alteration means that empty home loans will be offered under the same conditions as Home Improvement Assistance to vulnerable home owners.

6

Recommendations

6.1 The Director of Environment and Housing is recommended to approve the change in the Leeds Empty Homes Loan Scheme to allow owners to borrow funds where they have a current charge against the property provided it does not exceed 70% of the improved value

7

Background documents1

7.1 No

1 The background documents listed in this section are available to download from the Council's website, unless they contain confidential or exempt information. The list of background documents does not include published works.

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