GUIDE TO FINANCING PRIVATE SECTOR EMPTY HOMES WORK

2016 update

2 Financing private sector empty homes work

CONTENTS

Introduction 3

– Putting together a package 4

Private finance 6

– Bank or credit union loans 6

– Equity release 8

– Builders merchant discounts 8

– Letting agent finance 8

– Sweat equity (benefit in kind repairing lease) 9

– Alternative private finance products 9

– Community development finance institutions (CDFIs) 10

Council and public sector finance 11

– A corporate approach 11

– VAT reductions 12

– Councils’ general fund for housing capital expenditure 12

– National Housing Trust (NHT) (Council Variant) 12

– Scheme of assistance 13

– Communal repairs 13

– Housing Association Grant (HAG) 13

– Purchase/buy-back schemes 13

– Vacant dwelling council tax charging 15

– Commuted sums / developer contributions 16

– Scottish government funding streams 17

– Empty homes shared services incubator projects 18

– Council empty homes grants 19

– Empty homes grants 20

– Council empty homes loans 22

Sources of specialist funding 23

– Regeneration funding 23

– Energy efficiency funding 25

– Historic buildings funding 26

– Communities funding 30

Conclusion 34

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INTRODUCTION

This is the third in a series of guides produced for empty homes practitioners in Scotland by the Scottish Empty Homes Partnership. The first looked at how to build an empty homes database (see guide to data collection). The second was aimed at councils developing a private sector empty homes action plan (see action plan guide).

This third guide was first published in 2011. A lot has moved on since then so this 2016 update seeks to covers sources of finance for a range of private sector empty homes projects. The main focus of the guide is sources of funding for individual empty homes projects, but we also cover potential sources of revenue funding for empty homes staff.

It is worth pointing out from the start that empty homes work need not involve vast costs: our research shows that 83% of empty homes brought back into use by councils in Scotland used advice, information and motivation to do so rather than grants and loans.1 That said, empty homes that have been empty long term or had significant deterioration are likely to need some form of finance to get them into a state where they can be made habitable. Similarly, if we consider larger projects, conversion from non-residential to residential or major renovation of a larger building into smaller units, finance can often be a stumbling block.

1 in 10 empty home owners report that the main reason their home is empty is for financial reasons.2 Often, the issue is around the investment required to bring the property back up to a lettable or saleable standard, or to undertake the necessary renovations to move back into the property themselves. Councils can point out the economic case for bringing a property back into use – how investing a small amount of money will pay future dividends through rental or sale income. This can include quantifying the current

cost to the owner of leaving the property empty – an estimated £7,310 each year.3

Some owners may be motivated to spend but be without access to immediate funds. For this group, it is the officer’s job to point the owner towards the available options.

At the same time the focus of the Scottish Empty Homes Partnership has widened. We would like to provide information not just for how councils can encourage owners to bring their homes back in to use but also how housing associations, community groups, social enterprises and private developers can get involved to bring back to life one empty home, several in an area, or convert a previously non-residential empty building into homes.

So while the first two of our guides are primarily aimed at council empty homes staff, this updated finance guide is aimed at both empty homes practitioners and those with aspirations to undertake empty homes work from other sectors.

The guide is by no means a fully comprehensive list of finance sources or funders and does not constitute financial advice. Whilst some of the examples provided in this guide may only be applicable for owners in certain geographical areas, we hope the guide will also work to initiate discussions about developing new financial incentives using these examples as a basis for discussion.

Case study examples have been used to demonstrate how this funding has been used in practice.

1. An analysis of available data for empty homes work in Scotland, 2010 to present, Scottish Empty Homes Partnership, September 2015

2. An analysis of available data for empty homes work in Scotland, 2010 to present, Scottish Empty Homes Partnership, September 2015

3. The Scottish Empty Homes Partnership estimates that the average empty home owner in Scotland is losing £7,310 per year in lost rent, council tax payments, insurance and security costs.

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Putting together a packageThere is no shortage of local authorities in England directly funding empty homes work through core budgets and there are now a number of Scottish Local Authorities running their own in-house funded empty homes loan and grant programmes. There is a substantial case to be made for the cost effectiveness of outcomes achieved by empty homes work (see the Scottish Empty Homes Partnership’s Empty Homes Value Tool). That said, officers charged with driving forward empty homes initiatives will likely still need to develop the skills to assemble financing packages, with local authority seed money drawing in matching funding or attracting further spend from partners or private owners in order to make some projects financially viable – especially if the main aim is to increase the supply of affordable housing.

Similarly private owners, community groups or others organisations pursuing an empty homes project may need to look at compiling funding from a range of different sources to make a project stack up.

Examples of councils that have been creative in the use of funds are found throughout this guide. Our aim in describing the finance available, and detailing the successful examples, is to inspire others to develop equally creative packages. Such packages can provide money to kickstart activity, and show the shared outcomes that can be achieved by bringing private sector homes back into use.

Below is a summary of some key principles in developing a funding package:

Diversity – at the start of any project, due consideration should be given to the diversity of funding sources. Work that is too dependent on a single source may be vulnerable if the funding or grant criteria change. Think about who will benefit from the proposed work and make that the starting point for a list of potential funders. Attracting more than one source of finance should insulate the project from funders’ changing priorities. But involving too many

sources could make the project unduly complex.

In addition to mainstream or grant-based funding, it is also worth considering the potential for income generation. For instance, Manchester City Council charges for the expertise it has built up around the enforced sales procedure and Great Yarmouth Council has started a separate body (called nplaw),that charges for its expertise on the compulsory purchase process. Over time, there may be skills that Scottish councils or other bodies develop that would be valuable to others and could provide a supplementary stream of finance for the work. If your organisation is involved in acquiring empty properties there are of course also potential revenue streams through rents or capital returns from sale.

Skills – depending on what sort of organisation you are working in, you may want to consider who in the organisation has the skills needed to:

■■ prepare funding applications

■■ write papers to council making a case for mainstream funding

■■ explore income generating opportunities

■■ encourage private owners to use their own resources.

It is unlikely that any one person would have all the required skills and a team approach which ensures staff members are suited to the tasks they’ve been assigned would probably be most effective in putting together a funding package.

Outcomes – being clear about intended outcomes is probably the most important element in securing funding. Awareness of the aims and how they will be achieved will make it easier to identify who stands to benefit. Linking work on empty homes to council strategies, such as local housing and regeneration strategies, makes it easier for those further removed from the project to see its potential benefits for outcomes they are trying to achieve.

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Nationwide Foundation – Empty Homes Grants Programme

The Nationwide Foundation has run a £1m UK-wide Empty Homes Grants Programme for the last two years. The Programme Manager recently gave advice at the Scottish Empty Homes Conference that successful applicants were ones who could describe their project and what it would achieve clearly. Good practice is thinking about ‘the LIFT test’ – could you describe what your project is about in the time it takes to ride in a lift with someone up a few floors?

Buy in – another key to success is to ensure that senior officers and politicians in the area are committed to what you are trying to achieve. Getting key leadership voices on board can be important to winning over other decision-makers. Use examples of successful projects elsewhere

and highlight the outcomes likely to be achieved, emphasising the relevance of these to the concerns of the person being addressed. If you can gather views from the community that is currently affected by the lack of action, or who would benefit from your project, your case will be all the more powerful.

Scottish Empty Homes Partnership Local Project Service

If you are at the idea stage of developing a multi-unit empty homes project you may wish to get in touch with the Local Project Service at the Scottish Empty Homes Partnership. The Empty Homes Local Projects Manager will work with those with a project idea to help them develop it into a project plan, find partners and help with thinking about a funding package. Contact the Scottish Empty Homes Partnership for more details.

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PRIVATE FINANCE

Bank or credit union loansThe most obvious source of private finance is a bank, or credit union, loan. The loan could be used to cover the cost of putting a property up for sale or to renovate the property before letting it out.

Re-mortgaging a property can raise money for necessary empty homes work by releasing some of the equity in the home, and anyone with an existing mortgage can look into re-mortgaging. The officer working with an empty home owner might highlight that an Independent Financial Adviser would be able to assist, or suggest viewing a comparison or financial information website to identify the best financial product for them, such as ‘comparethemarket.com’ or ‘moneysupermarket.com’. Such websites usually have guides explaining the pros and cons of re-mortgaging, and mortgage calculators to work out savings, though exit fees must be considered. Some financial institutions are particularly amenable to empty homes projects.

Ecology Building SocietyThe Ecology Building Society specialise in mortgages for projects which minimise environmental impact or help promote sustainable living.

Capita Asset ServicesCapita Asset Services developed a custom and self-build scheme to improve access to mortgage lending specifically for empty homes, following requests from local authorities. The local authority signs up to the scheme, which is then available for empty home owners to access. It enables individuals to apply for a mortgage and secure an offer ahead of the improvement work taking place – with lenders providing a mortgage offer based on the projected value once the improvement works have been completed. The local authority retains some control over this project.

Glasgow Credit UnionA scheme has recently been launched between Glasgow Credit Union and Glasgow City Council, where the credit union provides deposit-free, 100% mortgages. If an interested party wishes to buy a long term empty property, in addition to the benefits above the council will also pay £500 towards buying costs. Though this doesn’t directly financially benefit the empty home owner, it would benefit potential buyers for example those on a matchmaker scheme list, making the purchase of an empty home more financially viable.

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Pictures: Angus Council

Before

After

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Another option would be a home improvement loan which is simply a type of borrowing used to fund work being done around a property; you might also see this called a renovation loan. There is no definitive basis for this type of loan, and although most borrowers opt to take out an unsecured loan it is entirely feasible to apply for a secured loan too. Again, comparison websites can be used to identify the best available rates for owners.

There are also a number of social banks whose aim is to provide finance for projects and businesses that achieve social outcomes. Charity Bank, Tridos, and Unity Bank are some examples. You can contact the Empty Homes Local Projects Manager at the Scottish Empty Homes Partnership if you are looking for more information on loans for an empty homes project that achieves social outcomes.

Equity releaseResearch suggests that a high proportion of empty home owners own their properties outright, after inheriting them or paying off the mortgage. Thus all but the most derelict empty homes will have some equity locked up in them which could be used to renovate and refurbish the property for rent or sale. Equity release is the name of a range of products targeted to over 55s to access the equity in a home – usually a lifetime mortgage or reversion plan. Some are more reputable than others and it is important for owners to seek independent financial advice before choosing this option.

London Rebuilding SocietyIn some regions there are private finance institutions, such as the London Rebuilding Society that run equity release schemes to finance repairs. The Society is a not-for-profit that provides loans specifically for London property owners. A share in the capital is retained and the loan is repayable on sale or transfer of the property.

Builder’s merchant discountsThe Scottish Empty Homes Partnership, together with empty homes officers around the country, have negotiated a variety of discounts and preferential rates for empty home owners from traders. These include suppliers of decorating equipment and building materials, from sellers such as Howdens Joinery, Finewood and Dulux. These discounts can be accessed by engagement with or referral by the empty homes officer.

Case studyIn the case of Main Street, Bannockburn, which had been empty for 1 year and 9 months, the owner had not started the necessary renovations to bring her property back into use, as she was building up the finances to fund them. The empty homes officer provided information to the owner on home improvement discounts, including those available in a local decoration outlet. The owner said this made the project financially viable to complete sooner, used this discount information and card, completed the renovations and moved into the property.

Letting agent financeSome letting agents will finance required renovation works for empty homes up front. For owners who want to let, but can’t afford the renovation work, this can offer a solution. For example, Weslo Housing Management run a scheme where they agree to carry out renovation work up to the value of £3,000, recouping the debt from rental income. A similar scheme could be suggested to a letting agent operating in your area.

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Case studyDue to antisocial behaviour in the close, the owner of an empty home on Glasgow Road, Camelon, was initially unable to find another tenant and the property had since fallen off her radar with it having been empty for 6 years and 8 months. The empty homes officer suggested renting the property through Weslo Housing Management, a local letting company. The property required some work to bring it up to a lettable standard, and the owner was unsure of this upfront cost. Weslo agreed to cover this cost up front, and recoup it through rent payments once the property was let, as well as arranging all the works. The property was brought back into use as affordable housing.

Sweat equity (benefit in kind, repairing lease)Financing (or resourcing) bringing empty properties back into use need not always involve a straight exchange of money. As detailed in the Scottish Empty Homes Partnership’s guide to creating an empty homes action plan, ‘sweat equity’ is another model whereby a tenant with building skills or access to finance to pay tradesmen can take on the refurbishment of a property in exchange for paying a low or nominal rent. The property’s improvement benefits the owner by increasing its value. And the tenant can use skills rather than rent to ‘pay’ for the tenancy.

This is a practical solution for owners who want to retain the property, but are unable to pay for the refurbishment works. In practice, it is a long term lease agreement between a property owner and tenant, where the tenant has responsibility for bringing the property up to a habitable standard and maintaining it during that period, in return for a low or no rent period. The Sweat Equity Guide developed by the Partnership and available on request explains the process and requirements in further detail. It can also be found online.

Case studyAn owner had inherited a property on Grangemouth Road, Bo’ness, and given an emotional attachment didn’t consider selling an option. However, he also couldn’t gather funds to address the work needed in the garden, which had been prompting complaints from neighbours and environmental health after the home had been empty for 6 years+. The EHO suggested sweat equity as one of the options open to the owner, and within a couple of months, the owner had identified a tenant who would enter into a sweat equity agreement with him, who soon moved into the property.

Alternative private finance products Alternative private finance products may also be available for owners. These will vary between areas and may or may not be a worthwhile consideration given the owner’s financial situation. For example, peer-to-peer lending, an industry now regulated by the Financial Conduct Authority, can give lower borrowing rates than traditional bank loans. Some of the bigger names include Zopa, Ratesetter and Funding Circle, but advice sites such as moneysavingexpert.com can provide more detail on this.

Similarly crowdfunding could be an option for a project whose benefits would apply to a wide range of people. Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of people. Today it is often performed via internet-mediated registries, but the concept can also be executed through mail-order subscriptions, benefit events, and other methods. An example of a crowdfunding website is crowdfunder.co.uk and more information on the concept can be found on the UK Crowdfunding Association at ukcfa.org.uk. For any new or niche product it is always best to do your own research and

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contact previous users to hear about their experiences if possible.

Community Development Finance Institutions (CDFIs)CDFIs are sustainable, independent financial institutions that provide capital and support to enable individuals or organisations to develop and create wealth in disadvantaged communities or under-served markets. They lend money to businesses, social enterprises, charities, and individuals who intend to use the money to benefit their local community. The Community Development Finance Association has a tool that can help you find such funding: findingfinance.org.uk

Pictures: Perth and Kinross Council

Before After

Before After

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COUNCIL AND PUBLIC SECTOR FINANCEOwners can access private finance directly, but there will be occasions when council and public sector finance can be used to develop programmes for incentive and enforcement work to bring private sector empty homes back into use.

A corporate approach Reducing the number of private sector empty homes can have an impact on other areas of council work, which can be relevant – and advantageous – in calculating the use of financial and staff resources. Consider how private sector empty homes work can contribute to other departments’ outcomes. A small amount of money from other departmental budgets could spread the cost, and the benefits, of bringing empty homes back into use.

Policy Areas/Departments that will benefit from private sector empty homes work include:

■■ housing – housing supply/affordable housing/quality of private rented sector outcomes

■■ environmental health – decreases in flytipping, preventative work with regard to other environmental hazards

■■ building standards community safety – empty homes are a magnet for anti-social behaviour, arson and other crime

■■ regeneration – empty homes can contribute to neighbourhoods’ unfavourable perception, but bringing empty homes back into use can boost regeneration efforts

■■ climate change – using existing assets uses less carbon than building new homes

■■ planning

■■ economic development – stimulates the local building trade.

The Scottish Empty Homes Partnership has an Empty Homes Value Tool which can be used to demonstrate the value in monetary terms of empty homes work council wide across a range of outcomes. The tool also outlines some of the costs of not pursuing empty homes work. The tool can be found on the Scottish Empty Homes Officer Network on the Knowledge Hub or get in touch with any member of the team to have a copy sent to you.

Perth & Kinross Council – a corporate approachPerth & Kinross Council have brought over 193 properties back into use since August 2014 using a joined up, cross-departmental approach. The Vacant Property Development Officer and Assistant sit alongside the planning department and work closely with the Empty Homes Accommodation Officer in housing as well as colleagues in building standards, environmental health, Perth & Kinross Heritage Trust and Perth City Centre Management. Because of this approach they are able to draw from a range of funding options to put together bespoke packages for individual empty property projects and owners. Currently the council works with the below funds and hope to add to the mix in future.

■■ Vacant Property Feasibility Fund £42K

■■ Empty Homes Loan Fund £350K

■■ Perth City Heritage Fund £650K (3 year Figure)

■■ Empty Homes Initiative £190K

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VAT ReductionsUnder certain circumstances, the standard rate of VAT can be reduced when renovating empty properties. If a house has been empty for two years, the owner is only obliged to pay 5 per cent VAT on work to bring it back into use as a dwelling, and if it has been empty for 10 years, the owner may be eligible for zero rated VAT. For the reduced VAT rate, the owner must use a VAT-registered contractor and must provide the contractor with evidence the property has been empty. An Empty Homes Officer can provide the owner with this evidence in the form of a letter with the date the property was last occupied. The VAT exemption can only be claimed if the owner plans to occupy the property themselves, under the DIY Housebuilders Scheme claim form 431C, or sell.

There are other circumstances where reduced VAT can be charged when renovating non-residential buildings into residential dwellings.

More information is available on VAT reductions at gov.uk/vat-builders/houses-flats or by phoning the HMRC helpline on 0845 010 9000.

Case studyThe owner had bought a property on Mellington Road, Ayr which had been empty for 2 years 10 months, thinking she would be eligible for financial assistance with refurbishment works, but this was not the case resulting in delays as a result of affordability issues. The EHO highlighted the reduced rate of VAT for owners and provided a letter of comfort for the owner. This assistance made the works affordable for the owner, who brought the property up to standard and moved in in October 2014.

Councils’ general fund for housing capital expenditure Private sector empty homes can be a source of affordable housing if owners are incentivised to exchange the tenancy for assistance in bringing it up to standard. Schemes that have worked elsewhere involve small grants or loans in exchange for council nomination rights for a set period. If your council has placed a priority on increasing the number of affordable housing units and/or reducing council house waiting lists, the council’s general fund for housing capital expenditure could be used to implement a scheme to free up private empty stock for use by the council (see sections below on Empty Homes Grants & Loans).

It might also be possible to invest Local Government Pension Funds in empty homes work – investment in social and affordable housing has already been taken on by some councils in Scotland, for example Falkirk.

National Housing Trust (NHT)(Council Variant)The National Housing Trust (NHT) (Council Variant) is another initiative trialled by Scottish Futures Trust. An NHT leverages council borrowing and funding from the private sector and involves the set up of Limited Liability Partnerships (LLPs) to oversee progress. In the council variant of this model, the council is the lead partner for the initiative alongside Scottish Futures Trust and the developer. It allows council to either build or buy homes to be let at affordable rates for between five and ten years. There are clear links to the potential for empty homes purchase with this scheme. More information on this is available at scottishfuturestrust.org.uk/our-work/housing/national-housing-trust-council-variant

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Scheme of assistanceThe scheme of assistance, introduced by the Housing (Scotland) Act 2006 allows local authorities to provide assistance for house repairs, improvements, adaptations and construction, as well as for the acquisition or sale of a house. The assistance can take various forms, including grants, standard and subsidised loans, practical assistance, information or advice.

Councils are required to fund property adaptations for disabled occupants, but they are allowed discretion in deciding other types of assistance. The cheapest assistance, involving limited use of staff resources, is the provision of advice and information. Advice to empty home owners on renting, selling or repairing property can kick start the process to bring it back into use.

Next in line is practical assistance, such as help in carrying out a survey of the work needed to make a property habitable, finding tenants or matchmaking investors with sellers.

Communal repairsAssistance with communal repairs can often be the stepping stone to moving an empty property on. The cost of communal repairs should be shared by all owners in a tenement under the Tenements (Scotland) Act 2004. However, in limited circumstances the council may be able to pay a missing owner’s share, which can be recovered from the non-paying owner at a later date by registering a repayment charge. Such circumstances include if the council is convinced the non-payer genuinely cannot afford their share, or it is unreasonable to expect them to pay, or if the non-payer cannot be identified.

Housing Association Grant (HAG)Housing association grant (HAG) is Scottish Government funding available

to social landlords to acquire land or buildings and build, convert or improve housing for rent or low-cost home ownership. There is no reason HAG cannot be used to acquire empty property and bring it into use as part of a development programme.

Purchase/Buy-Back Schemes Some local authorities and housing associations operate schemes to buy properties, to be added to their housing stock. This often costs less than building new properties and has environmental advantages too. Depending on the organisation, these buy-back schemes may be targeted specifically at empty home owners. This has the added bonus of removing the blight of empty homes on communities as well as the above advantages. The property is normally renovated, if required, to Scottish Housing Quality Standard and its energy efficiency usually greatly improved. Even after the spending to purchase and renovate the property, most buy-back properties cost significantly less than an equivalent new build property, thus saving the organisation money.

Funding can be provided by government in the form of Housing Association Grants (HAG), with the organisation ‘topping up’ the money in each case, depending on requirements. This funding may come directly from a funding stream within a council or housing association, such as the Housing Revenue Account (HRA), the fund generated by tenants paying rent. Another potential source of funding from within councils could be developer contributions, whereby a housing developer wishing to build new properties has to make a financial contribution to the council in lieu of providing affordable housing themselves. See the section on developer contributions for more detail.

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Pictures: Argyll and Bute Council

Before

After

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Vacant Dwelling Council Tax Charging Legislative changes have been put in place to allow local authorities the discretionary power to remove the empty property discount or set a council tax increase of 100% on certain properties which have been empty for one year or more. This provision only applies to long-term unoccupied properties and not second homes. The enabling legislation (The Council Tax (Variation for Unoccupied Dwellings) (Scotland) Regulations 2013/45) was passed by the Scottish Parliament and took effect from 1 April 2013.

There are some exceptions and different requirements where properties are made available for sale or let, and the decision about whether to implement any increase is for each council to make.

Local authorities still have the discretion to reduce or retain the council tax discount on second homes and certain long-term unoccupied properties. Local authorities are able to reduce or retain the discount within their entire area, or only those areas where second homes are a particular problem. Discounts vary from 10% to 50%. The 10% level has been retained to allow the additional income generated from reducing the discount to be identified.

The additional income from the 10 to 50% discount is retained locally and must be spent by local authorities or routed

through Registered Social Landlords (RSLs) for the provision of new-build affordable social housing to meet locally determined priorities, this can include empty homes work.

The income from the final 10% reduction and any increase is not ring fenced and its use is determined by local authorities. The Scottish Empty Homes Partnership believes there is an argument to be made that at least some of this additional revenue should be recycled back into empty homes work including funding permanent Empty Homes Posts (we know of at least one council that has used the money for this purpose), to fund empty homes financial incentives, or to finance enforcement against problem empty homes with no other home of returning to use.

There is a 50% discount for certain categories of second homes, and a discount of between 10% and 50% for long-term unoccupied homes.

Updated guidance to local authorities was issued in February 2013 and can be accessed through the Scottish Government guidance link below. The link will also take you to further supplementary guidance issued to local authorities in March 2015 which highlights where discretion can be used by councils with regards to exemptions to the council tax increases. This includes specific mention of the role of Empty Homes Officers in recommending time limited exemptions where action plans to bring empty homes

North Lanarkshire Empty Homes Purchase Scheme

An example of a buy-back scheme which has been a success is the North Lanarkshire Empty Home Purchase Scheme (NLEHPS). The council first established both the need for more housing stock to meet rising demand, and the desire to see empty homes tackled, in a series of consultations with residents in 2011. The NLEHPS was begun in 2014 and received £400k HAG funding from the Scottish Government, with an annual target of 20 properties to be purchased, so that’s around £20k of central government funding per property. The council then added the rest of the money required from its own resources, namely the Housing Revenue Account (HRA) and the Affordable Housing Investment Programme (AHIP). In one example, the council spent £47k purchasing and renovating a property to a high standard, and estimated that a new build property built to the same standard would have cost £68k – an increase of 44%. To date, the scheme has resulted in the purchase of 33 properties, with the first year exceeding its targets and the second year on course to do likewise.

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back into use have been agreed with owners. As well as through the Scottish Government link you can access this updated guidance on the Scottish Empty Homes Officer Network site here. This

discretion can be a valuable tool in working with empty home owners.

Guidance on second homes and long term empty properties (Scottish Government)

In Fife, a number of long term empty home owners were appealing the increased council tax charge because they claimed they were trying to renovate their properties, and could not afford to do so due to the extra amount of council tax they were being charged. Fife Council decided that if the owners would agree to do the work necessary to bring the home back into use, they would decrease the charge from 200% to 90%, in effect giving the owner a 110% discount while the work was progressing.

The catch is that the owners have to work with the council’s Empty Homes Officers, who go out and inspect the property, taking photos and making notes of what work needs to be done. After an initial visit the Empty Homes Officers report back to council tax colleagues with their recommendation about whether the owner should now receive a discount. If a discount is agreed the owner is subject to planned visits every 6-8 weeks to ensure they are on track with repairs. If they stop renovating the property, without good reason, they are put back on the 200% charge.

Commuted sums / Developer ContributionsMost councils require developers to ensure that sizeable developments include a percentage

(typically 25 per cent) of affordable homes, i.e. homes built by a social landlord for rent or low-cost ownership. Councils are enabled to do this by the Town and Country Planning (Scotland) Act 1997, sec.75. In cases where a developer can provide evidence that the affordable homes quota cannot be met, a commuted sum is paid instead. These sums can be used to invest in other forms of housing development such as empty homes work.

The first steps to investigating if this is an option for your empty homes work would be to contact the planning department

in your local authority to find out what their policies and processes are around developer contributions and commuted sums. There may be opportunities to put forward empty homes proposals for future commuted sums to be earmarked for an empty property regeneration project, perhaps a multi-unit conversion or for the creation of a local grant or loan fund to bring individual empty homes back into use. This could also apply if expected development projects have not come to fruition, there might be an opportunity to propose a use for the unspent funds.

The Scottish Government has issued guidance on commuted sums here: gov.scot/Publications/2010/08/31111624/0.

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Scottish Government Funding StreamsThere have been several funding pots of grant and loan funding available from the Scottish Government applicable to empty homes projects. Although most of those listed below are now closed to applications, they are worth highlighting to understand future similar products that might come up again.

Town Centre Housing Fund – now closed to applicationsThis £2.75 million Town Centre Housing Fund was aimed at seeing empty town centre properties brought back into use as affordable housing. Bids were sought from housing associations, local authorities and private developers to help bring empty town centre properties back into use for

affordable housing. Funding was awarded to seven towns in December 2013.

Town Centre Empty Homes Fund – now closed to applicationsThe Town Centre Empty Homes Fund aimed to bring empty homes and commercial premises back into residential use, recognising the particular impacts of empty homes in town centres around Scotland and the high costs of refurbishment often associated with these. Bids had to be for 2 or more units, and were for a mix of grant and loan funding. Properties could either be sold or rented after refurbishment at affordable rates. The scheme was launched in June 2015 and is now closed with the assessment period currently underway to determine the successful projects. This scheme received a high level of interest and as such it is

Dumfries Housing Regeneration Area

The Empty Homes element of the Dumfries Housing Regeneration Area, which aimed to improve a geographically distinct area in Dumfries town centre, included employing a dedicated officer focussing on the Housing Regeneration Area of Dumfries. This was funded from surpluses from a Developer Contribution for an out of town commercial development. The funding provided £100k Grant funding to bring empty properties back into use at an affordable rent for a minimum of 5 years, as well as funding the Empty Homes Officer’s post for 3 years.

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hoped a similar scheme will be open again in the future.

Town Centre Communities Capital Fund – now closed to applications The £1.7m Town Centre Communities Capital Fund is now closed to applications. The fund was open to community organisations to support capital projects making real and lasting improvements to town centres across Scotland. Its aim was to help enterprising communities to further unlock the potential of public assets in town centres, improve amenity and first impressions of a place in line with the Town Centre Action Plan, the Town Centre First Principle and guidance available through the Town Centre Toolkit.

Though this fund was not explicitly around bringing empty homes back into use it had clear potential to be used in this vein.

Empty Homes Loan FundWith this funding, councils bid to the Scottish Government to run an empty homes loan fund scheme in their area, with the aim of bringing empty homes back into use as affordable housing. Owners should get in touch with their local empty homes officer to find out if the scheme is running in their area. Where it is, the Empty Homes Loan Fund provides interest free loans to owners to be used towards costs of renovation work to bring their property back into use. Depending on the local scheme, the property then must either be brought back by letting it or selling it at affordable rates (see below for more on the Empty Homes Loan Fund and similar models).

Rural Housing FundThis fund is not yet open for bids. The Scottish Government’s Programme for Government 2015-16 described the fund as aiming to increase the supply of affordable housing of all tenures in rural areas of Scotland.

Over the next three years, the fund will be available to community groups and rural landowners, enabling them, and other eligible applicants, to take a more active role in meeting the housing needs of their communities. The fund will have two components, the main one offering funding to enable the direct provision of new affordable housing and upgrading of

empty properties and a second smaller component providing a contribution to feasibility studies.

Empty Homes Shared Services Incubator ProjectsA shared services approach to empty homes work can reduce staff costs and generate regional momentum and results. Developing expertise is the key – a dedicated empty homes officer is more likely to show expertise than several staff members for whom it is only a minor part of their work and whose responsibilities are fragmented, even if that dedicated officer is shared between two councils.

The Scottish Empty Homes Partnership runs a rolling programme of Empty Homes Shared Services Incubator Projects, administering seed funding on behalf of the Scottish Government for the first two years of a shared service arrangement.

Councils and other partners who are part of such a project contribute to the running cost and there are two models, either council managed or Shelter Scotland managed through the Scottish Empty Homes Partnership. There have been 6 such projects across Scotland since 2012. The latest shared service projects to be launched are the Dundee City Council & Angus Council Shared Services project which is managed by Dundee City Council; and the Glasgow City Council/Glasgow Housing Association Shared Services Project which is managed by the Scottish Empty Homes Partnership.

The aim of any such project is to pilot the benefits that dedicated empty homes staff can bring to council or other organisation in the hopes that after the two year seed funded period the partners will take forward empty homes work themselves, either continuing to share an officer or moving on to their own dedicated staff member. This transition has successfully been made by many previous shared services participants including the Forth Valley Empty Homes Project (Falkirk/Stirling) where the two councils continue to share an officer; and in Fife Council where an in house team of two Empty Homes Officers has been recruited to carry on the work that the shared services project began.

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Council Empty Homes GrantsA number of Scottish Local Authorities provide empty homes grants at different levels to incentivise empty home owners to bring their properties back into use and to enable larger multi-unit empty property projects to stack up financially. There are broadly two types of grants – Feasibility Funding & Empty Homes Grants.

Feasibility FundingFeasibility funding is usually in the form of a small grant of several thousand pounds,

depending on the size of the potential project. This funding is used for things like architects and building surveyor fees and sometimes consultants to help prepare business plans or perform local research to demonstrate housing demand where waiting lists don’t tell the whole story. Sometimes such funding is expected to be match funded and often it will be paired with help and advice from the local authority or other body (Scottish Government for example) providing the funding.

Perth and Kinross Council – Vacant Property Feasibility Funding

Perth and Kinross Council have been offering Vacant Property Feasibility Funding as part of the package of funding available to regenerate empty buildings (both residential and commercial) since August 2014.

Eligible Buildings are:■■ located within Perth and Kinross Council geographical boundary.

■■ below the necessary standard and be unlikely to be brought back into use without the proposed repair or conversion work being undertaken.

■■ have been unoccupied for at least 6 months up to the date of the application for the grant.

■■ owned by the applicant

Feasibility funding can be used for:■■ Architect’s design drawings

■■ Quantity surveyor’s cost estimates

■■ Structural engineer’s report

■■ Chartered surveyor’s valuation advice or development appraisal

The maximum contribution towards fees will be £5,000 which will represent up to 50% of the total fees incurred.

Perth & Kinross’s Vacant Property Development Team have reported high uptake of their feasibility funding with very few projects not progressing to undertake their empty homes project following feasibility funding.

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Empty Homes Grants The other type of grant is one that provides the owner with part of the cost of purchasing or renovating an empty home, in Scotland this is usually in exchange for the property being let out at an affordable rate for a set number of years or sold at an affordable level.

The recent £4m Town Centre Empty Homes Fund being run by the Scottish Government has both a loan and grant element for bidders with specific projects in mind in eligible areas.

Local Authorities also can provide Empty Homes Grants from their own resources taking into account the financial and other benefits to the council of bringing empty homes back into use. Levels of grant vary usually from £10k upwards depending on the work needed, the contribution of the owner and sometimes the location of the property (rural properties may sometimes attract higher levels of grant to account for the increased costs of renovation works in remote areas).

Argyll and Bute Council

Argyll & Bute Council have the facility to offer a variety of empty homes grants and loans to bring long-term empty homes back into use depending on the circumstances of the owner and the planned end use of the property. All grants and loans are discretionary.

Provision of Social Housing

■■ Refurbishment grants up to £20K per property providing the owner is willing to lease the improved property to a Registered Social Landlord (RSL) for a minimum of 10 years and the property is brought up to Scottish Housing Quality Standard (SHQS).

and/or

■■ A low cost loan facility up to £20K per property providing the owner is willing to lease the improved property to an RSL for a minimum of 5 years with the lease to the RSL being matched to the loan repayment period.

Owner Occupation

■■ Discretionary grants may be available for owners of empty homes who are currently resident in Argyll and Bute and will be occupying the property on completion of renovation works. Grant of 40% of cost works up to a maximum £10,000.

Private Rented Sector

■■ Discretionary grants may be available for owners who are currently resident in Argyll and Bute and will be privately renting the empty property on completion of renovation works. Grant of 30% cost works up to a maximum £7,500.

Applications to date have been for the maximum grant amounts and these projects are on-going. The uptake on loan facility has been low, although there are four properties where loan funding may also be awarded if there is a funding gap.

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Pictures: Argyll and Bute Council

Before

After

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Council Empty Homes LoansEmpty homes loans can also be provided to owners of empty properties to bring them back into use. Again, as with empty homes grants above, in Scotland, empty homes loans are usually given out with an expectation that the resulting renovated property will be let out or sold at an affordable rate. Many such loans are given out interest free or at a lower interest rate than commercial lenders.

The Scottish Governments £4.5m Empty Homes Loan Fund initially awarded 21 different projects Empty Homes Loan Fund money. Most of these were councils who then held a pot of loan fund money which they could loan out to individual owners in their area. Many of these funds are still ongoing and councils are due to pay back this money to the Scottish Government by 2023/24. Until then the money can be spent, recouped through loan repayments from owners and re-spent. The success of individual loan fund projects has varied with Angus Council and Glasgow City Council (plus housing association partners) spending all their loan fund money quite quickly, while others have struggled to attract interested owners. Some projects have returned the loan fund money to the Scottish Government unspent.

A number of other Scottish Councils have developed their own Empty Homes Loan Schemes outside the Scottish Government scheme. These are run on similar principles however with a set number of years at affordable rent or sale as a requirement for receiving the loan. Housing Association partners have sometimes been taken on as managing agents of the renovated units and sometimes loan recipients are required to let their properties through a council Rent Deposit Guarantee Scheme or Private Sector Leasing Scheme.

A very successful loan model in Kent – the Kent No Use Empty Scheme – similarly gives loans for re-use of empty property either through rent or sale but does not require the end use be affordable. The aim of the scheme is to regenerate communities, remove blight and increase overall housing supply numbers to release pressure on the system elsewhere. The Kent model is award winning and has been replicated successfully in other locations including Bristol. A very similar model was also used as part of the £20m Welsh Houses to Homes Scheme which required loan fund money to be paid back within 2-3 years, however properties could be let out or sold at market rates.

Angus Council Empty Homes Loan Fund

Having surveyed empty home owners the Council were acutely aware that many home owners couldn’t access the finance to refurbish their properties. Angus Council then made a successful application to the Scottish Governments Empty Homes Loan Fund for £120,000 to bring 7 empty properties back into use. With the loan fund at their disposal the Council were then in a position to offer interest free loans to bring 5 properties (to date) back into use as affordable housing. Having organised satisfactory works to bring the properties up to standard, then found a tenant, the owners then used the rental income to make monthly repayments toward their loans, with repayment periods ranging from 5 to 8 years, giving the owners flexibility and financial peace of mind. The market rental rates in Angus are similar to ‘affordable rates’ therefore for many empty home owners the Angus loan scheme offered real incentive. The scheme has provided wide-ranging benefits to all those involved; both owners, tenants and the Council.

There was a relatively slow uptake when the scheme was in its infancy but following press coverage of successful projects, many empty home owners began to take notice and realise that the scheme does work and they subsequently came forward to access loans. With nearly all the loan fund allocated, the Council are now investigating ways that they can replicate the scheme to assist more empty home owners.

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SOURCES OF SPECIALIST FUNDING The next section looks at potential sources of finance that are not necessarily aimed directly at bringing private sector empty homes back into use, or at providing affordable housing, but that have the potential to be used for this purpose. This document is not meant to provide an extensive or complete list of possible sources, but rather points to some options to explore which will be dependent on the unique circumstances of the empty property you are dealing with, or with the home owner themselves.

Regeneration fundingPerhaps the most obvious policy link to empty homes work, apart from housing supply, is to regeneration. Empty homes can bring down the appearance and feeling of well-being within a community, and bringing them back into use can breathe new life into a neighbourhood. The blight factor should not be underestimated. Often, that is the reason for homes being brought to the attention of the council or elected members in the first place.

Whilst energy efficiency and historic buildings funding is usually property specific, funding for regeneration usually

isn’t. This can make it hard for a council officer or home owner to apply for regeneration funding to bring a single empty home back into use.

Your council may, however, be accessing regeneration funding for larger scale projects and you may have some success in obtaining general funding if you can work with colleagues to make bringing private sector empty homes back into use part of a wider, area based regeneration scheme.

One example of this is the conservation area regeneration scheme (CARS). CARS provides financial assistance for area-based regeneration and conservation initiatives by local authorities. Assistance is either through support to establish a conservation area regeneration scheme or through support for a Heritage Lottery funded townscape heritage initiative. More information is available at this link to the conservation area regeneration scheme section of the Historic Scotland website: historic-scotland.gov.uk/index/heritage/grants/conservation-area-regeneration-scheme.htm

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Case study Council officers initially contacted the owners of Glengate Hall, Angus which had been empty for 9 years, in 2012 to discuss the Conservation Area Regeneration Scheme (CARS) which was underway in Kirriemuir. Having expressed an interest to bring the hall back into use, the owners were however concerned about raising the required finance to complete the project. Funding from both CARS and the Empty Homes Loan Fund was secured late 2012, and by August 2014 nine flats were renovated and let as affordable housing in the area.

Case study details supplied by Colin McGarva, Angus Council.

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There are several ‘funding finders’ put together by different organisations to help their members identify funding, some identified below, usually comprising a spreadsheet with eligibility criteria, closing dates, and links to more information. These are regularly updated and can be an easy way to find accessible information from a large variety of sources. (See also sections on energy efficiency and historic buildings funding).

Scotland’s Towns Partnership’s Funding Finder The Scotland Town’s Partnership describe this tool as the go-to place to source potential funding for town centre regeneration. Comprising nine categories, the Funding Finder provides easy to read information on current funding streams, highlighting where new funds have been announced and where application deadlines are looming. More information can be found at scotlandstowns.org/funding_support

Energy efficiency funding The Scottish Government has a target to cut carbon emissions in Scotland by 80 per cent by 2050.

Increasing the energy efficiency of domestic housing is part of the policy. Standards for new build are continually updated to promote higher energy efficiency, however new build will remain only a small proportion of the housing stock, and the major effort to increase energy efficiency will be focused on retrofitting homes built before 2011, which will still be the majority in 2050.

The link with empty homes which could qualify for funding aimed at retrofitting housing for energy efficiency is obvious. Some of the funding is only available for owner occupiers, so worth double checking with each funding source the criteria for assistance.

The Energy Saving Trust has advice centres through their Home Energy Scotland programme, which can provide details of the latest energy efficiency funding

schemes and other free, impartial advice to householders, community groups and private sector landlords. You can contact Home Energy Scotland on 0808 808 2282, or find out more at their website energysavingtrust.org.uk/domestic.

EST Scottish Grants and Discounts ToolThe Energy Saving Trust has a Scottish Grants and Discounts Tool which can highlight what options are available, and has lots of up to date information on its website.

Feed-in tariffsThe Feed-in tariff scheme is a UK Government scheme set up to encourage uptake of a range of small-scale renewable and low-carbon electricity generation technologies. The homeowner, if eligible, benefits in three ways from the scheme: the energy supplier pays a set rate for each unit of electricity generated, they pay a further rate for each unit exported back to the electricity grip (i.e. energy ‘leftover’ that the home owner hasn’t used), and electricity bills will also be lower as the homeowner won’t have to buy as much electricity from their provider. Please note the Department of Energy and Climate Change are reviewing the scheme with changes to the tariff likely to come into force in January 2016. More information is available on this on the Energy Saving Trust’s website energysavingtrust.org.uk/feed-tariffs, including a calculator to work out how much an individual might be able to save.

Home Energy Efficiency Programmes Scotland (HEEPS)HEEPS is the Scottish Government initiative to tackle fuel poverty and increase energy efficiency in homes, involving several different schemes. Under the HEEPS Cashback scheme, owner occupiers and private landlords might be eligible for a rebate up to £1,300 towards installing certain energy efficiency measures. The scheme is open to properties in council tax bands A to C. All householders must first contact Home Energy Scotland, through the Energy Saving Trust, for a referral to the scheme. energysavingtrust.org.uk/heeps-cashback-scheme.

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Interest free loans are also available through the HEEPS Loan scheme for up to £10,000, for works such as solid wall insulation or a new boiler. Like with the Cashback scheme, applicants must first go through Home Energy Scotland and works must have been recommended in a Green Deal Advice Report. Loans are also available for some applicants to cover the costs of connecting to the gas grid. More information is available at energysavingtrust.org.uk/heeps-loan-scheme.

Home Energy Scotland renewable local schemeArea based schemes are also available, and have £65 million of grant funding for 2015/16, so there may be specific funding available in specific areas for local authority fuel poverty programmes. The Home Energy Scotland renewables local scheme is applicable for loans up to 75% of the total cost of renewables systems (up to £10,000) and up to 100% of connection to a district heating scheme (up to £5,000). Please note this loan is only available to owner occupiers.

Domestic renewable heat incentive (RHI) schemeThe renewable heat incentive scheme, administered by Ofgem, aims to increase the use of renewable energy as an alternative to fossil fuels, contributing to the ambition that 12% of heating will come from renewable sources by 2020. To be eligible, a homeowner must have an eligible, renewable heating system (which must be certified and a named product on Ofgem’s Product Eligibility List), having an Energy Performance Certificate and, in most cases, a Green Deal Advice Report. After joining the scheme, and abiding by the requirements, people will receive quarterly payments for seven years for the amount of clean, green renewable heat their system produces. Full criteria and more details on how to apply are available at Ofgem’s website: ofgem.gov.uk/environmental-programmes/domestic-renewable-heat-incentive-domestic-rhi/about-domestic-rhi

Resource Efficient Scotland SME Loan schemeEmpty home owners looking to rent out their home might be eligible for the Resource Efficient Scotland SME Loan

scheme. Loans from £1,000 are available to help businesses reduce their carbon emissions and costs through improved energy, material resource and water efficiency and are interest free unless the landlord is also claiming RHI or through the feed in tariff. Eligible works might include installation of a new biomass boiler, upgrading glazing, or installing insulation. Whilst the Energy Saving Trust administer the scheme, Resource Efficient Scotland provide advice and support to prospective applicants, with more details available at resourceefficientscotland.com/sme-loans-scheme

Energy Company ObligationThe Energy Company Obligation, or ECO, is a government scheme that obligates larger energy suppliers to help improve energy efficiency in domestic premises. ECO2 is the current obligation period running April 2015 to March 2017. Suppliers have targets to meet to reduce carbon emissions by promoting primary and secondary measures, such as improving the insulation of properties. The Carbon Saving Community Obligation requires suppliers to promote insulation measures and connections to district heating systems in areas of low income, and the Home Heating Cost Reduction Obligation requires is centred around support low income and vulnerable households. As such, there may be some help available from energy suppliers if the empty home in question is eligible. Most energy suppliers’ websites explain the support they can provide, and it does not always need to be the property’s energy supplier who can help. Ofgem hold a list of obligated suppliers and their contact details under ECO at ofgem.gov.uk/publications-and-updates/supplier-contact-details.

Historic buildings fundingSome specialist funding is available for the conservation of historic buildings. Such funds are mainly focused on preservation, rather than on bringing empty properties back into use. But some empty homes qualify as historic buildings. In such cases, these funding streams could contribute to making the property habitable, or using it to bring the home up to a saleable or lettable standard.

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For information on sources of funding, take a look at the Architectural Heritage Fund’s ‘funds for historic buildings’ website ffhb.org.uk.

Architectural Heritage Fund’s ‘funds for historic buildings’ website

The funds for historic buildings website includes a comprehensive guide on funding for anyone seeking to repair, restore or convert for a new use any historic building in the United Kingdom (excluding the Channel Islands and the Isle of Man) which is listed, scheduled or in a conservation area and of acknowledged historic merit. It includes details of virtually all substantive funding sources which specialise in historic buildings, as well as many which provide funding for historic building projects within a wider remit. The guide includes the major heritage sector funders such as Historic Scotland and Heritage Lottery Fund, and lists smaller funding bodies with specialist aims.

The Architectural Heritage Fund itself also offers loans, at below market rates of interest, to charities seeking to undertake qualifying projects, either for the acquisition of a building or to provide working capital throughout a restoration project. In this sense it might be plausible for a not-for-profit organisation (some community groups might meet the criteria) to use these funds to purchase and renovate an eligible empty home. At present, their funds are fully committed but they encourage expressions of interest at all times. Only organisations with charitable status are eligible for financial assistance from the AHF, and financial assistance is available only for buildings that are listed, scheduled or in a conservation area and of acknowledged historic merit. Please note that the AHF cannot help private owners. For more information, visit their website ahfund.org.uk/loans.php.

For projects which do not qualify for loans from the AHF, or which require longer term

funding, the Ecology Building Society and the Triodos Bank offer loans to those involved in the repair of historic buildings, albeit at commercial market rates of interest. There are also a number of loans available at below full commercial market rates with the specific aim of carrying out socially desirable projects (which can involve the restoration of historic buildings as an incidental benefit). The Charity Bank, for example, might be able to offer such a loan.

Building Preservation Trusts Scotland also has a network of building preservation trusts (BPTs) which, while they do not generally offer grants or loans, can work as partners or agents for empty homes projects and may lever in heritage sector funding. A building preservation trust is a charity whose main aims include the preservation and regeneration of historic buildings. There are more than 300 of these organisations in the UK, some with remits in Scotland, others with a UK-wide remit. The Architectural Heritage Fund maintains a register of active BPTS and can advise if one is operating in your area – visit ahfund.org.uk for more information.

Specific geographical areas might have additional funds available to them. For example, Perth and Kinross Heritage Trust provides historic building grants towards building work on Statutory Listed Buildings which involves the repair, conservation or restoration of architectural features using traditional materials and techniques, for example: thatching; slate-work; sash and case windows; cast iron finials and decorative railings; stone carving; stained glass windows; lime mortars and harl. Applications for the fund may be made by prospective buyers in addition to current owners of eligible (including but not restricted to) empty buildings. There is currently no time limit on applications however more up to date information can be found on their website pkht.org.uk

In the west, Glasgow City Heritage Trust run a Building Repair Grant programme where grants are available to fund 40% of eligible costs up to a maximum of £100,000 to help preserve and enhance the unique character of the built environment. In principle, grants

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Pictures: Forth Valley Empty Homes Project

Before

After

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can be offered for external repair and reinstatement works to any historic property within Glasgow’s 22 conservation areas or any A or B-listed property within Glasgow’s boundaries, however some restrictions and priorities do apply, as outlined at glasgowheritage.org.uk/grants.

Aberdeen City Heritage Trust have a similar scheme aberdeenheritage.org.uk/grants.

The Edinburgh World Heritage – Conservation Funding Programme has a pot for repayable grants. These are for conservation work to privately owned historic buildings, and can cover up to 70% of eligible costs. They are repayable on the sale or transfer of the property. More information is available at ewht.org.uk/repayable-grants

Historic ScotlandHistoric Scotland has a variety of financial assistance schemes available that could be used towards empty homes work.

Historic building repair grants schemeUnder the agency’s historic building repair grants scheme, financial help is available to owners to meet the cost of repairs using traditional materials and specialist craftsman to conserve original features in buildings of outstanding architectural or historic interest. In return, owners must insure and maintain the building and allow access to visitors. ‘New’ empty home owners who have purchased their home in the last 12 months are not prioritised under the scheme. The scheme is open throughout the year with 3 closing dates so applications can be considered in batches. For more information follow this link to the building repair grant section of the Historic Scotland website historic-scotland.gov.uk/building-repair-grants

Thatched houses maintenance schemeFinancial assistance is also available through the thatched houses maintenance scheme towards the cost of maintaining historic buildings’ thatched roofs – including complete re-thatching, repairs to divots and minor roof timber repairs. For more information follow this link to the thatching section on the Historic Scotland website historic-scotland.gov.uk/

index/heritage/grants/thatched-houses-maintenance-scheme.htm

Heritage Lottery Fund The Heritage Lottery Fund is another body that might be able to provide financial assistance to empty homes work. The Heritage Lottery Fund’s main vehicle for supporting projects related to UK national, regional or local heritage is through ‘Our Heritage’ grants of £10,000 to £100,000. There are no deadlines for these applications. For more information, visit the Heritage Lottery Fund website: hlf.org.uk/looking-funding/our-grant-programmes/our-heritage.

For grants over £100,000, applications must be made to specific programmes which will change over time. One such programme includes its Townscape Heritage schemes, which replaced the Townscape Heritage Initiative and makes grants to local, regional and national organisations to work together to reverse the decline of our best-loved historic townscapes. The scheme can have a single applicant, such as a local authority, or a formal partnership, who can then spend the money themselves or provide grants to others, such as private empty homes owners or not for profit organisations. The scheme must work towards eight outcomes centred around heritage, people and community benefits. More information is available on the Heritage Lottery Fund website: hlf.org.uk/looking-funding/our-grant-programmes/townscape-heritage

Sharing Heritage is another part of this pot. This programme is for any type of project related to heritage in the UK, with grants from £3,000 to £10,000 available. The project must achieve at least one outcome for people, including the development of skills, learning about heritage, a change in attitudes and/or behaviour, having an enjoyable experience or volunteering time. Other aspects that must be considered are outcomes for heritage, including that it is better managed, in better condition, better interpreted and explained, or identified/recorded somewhere, and outcomes for communities including a reduction in environmental impacts, a boost to the local economy, and that local areas will be a

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better place to live, work or visit as a result of the project. The funding is available for a variety of organisations including charities or trusts, social enterprises, community or voluntary groups, community/parish councils, community interest companies, local authorities and other public sector organisations. Further guidance is available at hlf.org.uk/HowToApply/programmes/Pages/sharingheritage.aspx

National Trust for Scotland Little Houses Improvement SchemeThe Little Houses Improvement Scheme (LHIS) is a branch of the National Trust for Scotland’s (NTS) buildings department and operates as a building preservation trust (see above). It works to save, restore and regenerate historic and vernacular domestic buildings throughout Scotland. The Little Houses Improvement Scheme (LHIS) was launched in 1960 with a premise ‘to restore houses of character for re-sale’ across Scotland. Essentially, the LHIS buys neglected or dilapidated historic buildings, then restores and sells them on in order to promote their regeneration and renewal as well as the communities in which they are situated.

The LHIS was designed to preserve buildings less grand than the trust’s well-known castles and country houses, but no less important to Scotland’s architectural and cultural heritage. LHIS projects are usually undertaken where buildings of importance are under threat of dereliction, decay and neglect. The buildings are often in historic townscapes, where neglected and dilapidated buildings create an air of neglect and degeneration. The scheme is based on the understanding that restoration of a building of architectural merit can have considerable benefits, often leading to wider regeneration and the renewal of local pride. More information is available at nts.org.uk/Buildings/LHIS

Case studyIn this case study, buildings at The Cross, Culross, Fife were owned by the National Trust of Scotland and had been empty since the 1990s after problems with damp. The empty homes officers had been supporting the National Trust since the start of 2013 to assist them in bringing the property back into use. The National Trust decided to renovate the properties to let them, and the Little Houses Improvement Scheme undertook the assessment, project managed the work, and secured the funds. The council’s Empty Homes Officers were able to help them take advantage of VAT discounts, saving £26,000 over the course of the work. The properties were rented out to new tenants in July 2013.

Communities FundingEmpty Homes Community Grants ProgrammeThis programme ran from 2011-15 in England and was open to registered charities, community interest companies, social enterprises or other community based organisations. Grants comprising a total of almost £50 million were intended to cover capital costs of work, and any long term empty properties not owned by local authorities or housing associations were eligible, including commercial properties if they were brought back for residential use. More information on this programme is available at self-help-housing.org/empty-homes-grants-programme/the-community-grants-programme-introduction.

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Case study The Canopy Housing Project is a self-help, community housing project based in inner city Leeds which was founded in 1998. It renovates derelict and empty houses to create decent homes for people that are homeless. With funding from the Empty Homes Community Grants Programme (EHCGP), they were able to double their staff team creating 8 jobs, and purchase 14 long term empty homes which were renovated and brought back into use by creating good quality, affordable homes. The Canopy model brings together local volunteers with different skillsets, and enables homeless families who will be the end recipients of the renovated empty homes to be involved in the refurbishment work too. This helps to meet the wider community benefit aim of the EHCGP. More information on Canopy Housing is available at self-help-housing.org/case-studies/canopy-housing-project-leeds

Nationwide FoundationThe Nationwide Foundation have several pots of funding available for work aligning to their Decent Affordable Homes Strategy, which aims to “create conditions which increase the number of decent affordable homes and to break down the barriers to the creation of those conditions”. A specific pot of funding, the Nationwide Empty Homes Fund (now closed) has been available for the last two years though at time of writing is not accepting new applications. This fund makes grants and investments to organisations bringing empty properties into use for people in need. Information on their current funding is available at nationwidefoundation.org.uk/emptyhomes.asp

The Highlands Small Communities Housing Trust

The Highlands Small Communities Housing Trust was successful in their application to the Nationwide Empty Homes Fund in 2014. The funding, a combination of grant and loan, has given HSCHT the means to renovate two Highland properties. Druim Garbh is the first of these properties. Nationwide were keen to incorporate a training element into the project too, which was included via an apprenticeship. The funding was used to renovate the property into new affordable homes for people in housing need, and the project was completed in July 2015. More information is available at: hscht.co.uk/blog/category/acharacle

LandAidLandAid launched a UK wide £1 million fund (now closed) for work which turns empty properties into supported accommodation for young people who are at severe risk of becoming homeless in 2015. The fund closed in November 2015, but provides an example of the breadth of funding available when incorporating wider outcomes or when focusing on specialist groups. landaid.org/our-cause-impact/applying-funding-support

The Big LotteryThe Big Lottery have several pots available that might be used for empty homes work.

One such pot is the Scottish Land Fund. The last round of applications for the Scottish Land Fund closed in November 2015, however a new fund for 2016-20 at £10 million per year has been announced that will open in due course for applications. This fund has been extended to cover both rural and urban areas with funding available to local communities to take on land or land assets. The aim of the fund is to support communities to become more resilient and sustainable through the ownership and management of land and land assets, and one aspect is the provision of funding to complete viable

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land assets acquisition projects. Though the details of this fund haven’t yet been announced, previously building purchase has been allowed in applications where the building is critical to the successful, sustainable development of land, or where the building is essential to the retention or development or lifeline local services. In this sense, it could be used for the purchase and renovation of empty homes by communities. More information on this fund is available at biglotteryfund.org.uk/scottishlandfund

Another is the Investing in Communities: Growing Community Assets fund. This fund is designed to support communities to take more control and influence over their own future through ownership of assets. Funding of between £10,000 and £1million is available to voluntary and community organisations or social enterprises, or private companies if they meet certain criteria over use of the funding. Projects are considered where the following four outcomes are met:

■■ Communities work together to own and develop local assets

■■ Communities are sustainable and improve their economic, environmental and social future through the ownership and development of local assets

■■ Communities develop skills and knowledge through the ownership and development of local assets

■■ Communities overcome disadvantage and inequality through the ownership and development of local assets.

Forms can be found at: biglotteryfund.org.uk/global-content/programmes/scotland/investing-in-communities-growing-community-assets as well as additional criteria to determine eligibility for empty homes work.

Co-operative Membership Community FundThe Co-operative operate Community Fund grants, where between £100 and £2,000 is awarded to community, voluntary, or self-help groups to run projects that meet certain criteria. To be successful, a group must carry out positive work in the community, and a

project must be innovative, support co-operative values and principles, and

■■ address a community issue (this might include a blight on the community from a long term empty home or homes)

■■ provide a good long-term benefit to the community (such as increasing the supply of affordable housing)

More information is available at the following link: co-operative.coop/membership/local-communities/community-fund/onlineapplicationprocess

Third Sector Loan FundThe Third Sector Loan Fund has made available both secured and unsecured loans of between £250,000 and £3 million to support registered charities and social enterprises working to improve the economic and social well-being of individuals, particularly those who are vulnerable and disadvantaged, within the UK. The funding is aimed at a variety of sectors including housing, and can be used for working capital, property purchase or renovation and other capital expenditures. The Fund was been set up by fund management company Social and Sustainable Capital (SASC) with financing of £13.5 million from the high street bank Santander, £15 million from the social investment bank Big Society Capital and £1.5 million from the social finance company Social Investment Business (SIB). More information on time frames for loan repayment, and interest rates, is available here: sibgroup.org.uk/third-sector-loan-fund

Distinct owner characteristicsThere might be opportunities to look at the distinct situation of the individual owner of the empty home. Turn2us is a national charity that helps people in financial hardship to gain access to charitable grants. A search engine highlights different grants available by gender, location and age. As an example, the RSABI (formerly the Royal Scottish Agricultural Benevolent Institution) provides financial assistance help to people who have worked in Scotland in land-based occupations and who are ‘suffering hardship’. One of type of financial assistance they offer are one-off grants for specific, essential items

33 Financing private sector empty homes work

that applicants are unable to afford themselves, such as essential home modifications and repairs. This might be useful for owners who find themselves

unable to afford essential works that might help move an empty home on and other pots may be available for other owners.

34 Financing private sector empty homes work

CONCLUSIONThis guide cannot cover all potential sources of funding for empty homes work. Other sources that could be considered include those aimed at employability (empty homes projects can be linked to training opportunities and apprenticeships), community safety and economic development, to name a few. In all cases, the principles of diversity of funding, skills and buy in described in the first section of this guide will apply.

To receive updates of new funding streams that the Scottish Empty Homes Partnership (SEHP) becomes aware of you can become a member of the Scottish Empty Homes Officer Network on the Knowledge Hub for free. Just contact a member of the SEHP team to join.

Guides and other useful linksScottish Empty Homes Partnership Data Collection Guide – 2012 Update

Scottish Empty Homes Partnership Guide to developing an empty homes action plan – 2013 update

Sweat Equity/Homesteading Information Pack & Appendix

Scottish Empty Homes Partnership Empty Homes Value Tool

HMRC – Information on VAT Reductions for Empty Homes

Scottish Government Guidance on Council Tax for second homes and long term empty properties

Scottish Empty Homes Partnerships ContactsKristen Hubert, National Manager, 0344 515 2461, kristen_hubert@shelter.org.uk

Gavin Leask, Empty Homes Local Projects Manager, 0344 515 2237 gavin_leask@shelter.org.uk

Frances Snee, Empty Homes Adviser, 0344 515 1941, frances_snee@shelter.org.uk

The Scottish Empty Homes Partnership exists to help bring private sector empty homes back into use. The Partnership is funded by the Scottish Government and hosted by Shelter Scotland.

The Partnership is hosted by