Flats over Shops (Hansard, 5 June 2003)

§ Baroness Maddock
asked Her Majesty's Government:
Whether they have any proposals to help bring back into use flats over shops that are lying empty.

§ The Minister of State, Office of the Deputy Prime Minister (Lord Rooker)
My Lords, the Government recognise the potential contribution to housing supply that unused space above commercial premises could provide if converted to residential use. We have already introduced tax allowances to encourage such conversions. Only last week, we published guidance on unlocking the potential of empty properties.
Late last year, I asked the British Property Federation to advise me on the barriers that it sees that exist to prevent more residential accommodation over 1483 shops being made available. I shall certainly consider what further measures might be appropriate in the light of the BPF's findings.

§ Baroness Maddock
My Lords, I begin by wishing the noble Lord a very happy birthday.

Noble Lords
Hear! hear!

§ Baroness Maddock
My Lords, I declare an interest as patron of the Empty Houses Agency.
I thank the Minister for an update as regards his department's position on this issue. I seek two reassurances. There is a scheme called Living Over the Shop, which has been helping to restore properties for a number of years. I understand that it is running into difficulties over money. First, can the Minister reassure me that a lack of finance will not mean that the scheme fails? Secondly, bringing back properties often requires refurbishment on which 17.5 per cent VAT is imposed at the moment. Is the Minister lobbying the Treasury to back him on this matter?

§ Lord Rooker
My Lords, I thank the noble Baroness for her good wishes. I was trying to keep quiet about the matter. I also thank her for her welcome. As I said, the department has published a document relating to the unlocking of the potential of empty property only last week, which is a valuable practical guide.
The project concerning living over shops has made a valuable contribution. I have met Ann Petherick on at least two occasions. She is part of the task force of the British Property Federation. At a meeting late last year I asked it to look into the issue. There has been previous funding from my department, but we have no plans for funding at the moment. However, I understand that one of the recommendations which will be brought forward by the task force is for a national programme. I hope that we shall be able to discuss that with our colleagues in the Treasury. More information needs to be available. There is so much potential for extra revenue let alone for the extra homes for commercial properties. About£ 18 billion a year could be saved and be available to UK businesses through the improved use of their own property. So there is an enormous economic and social potential. But as regards a particular project I cannot give a commitment in advance of the recommendations from the Property Federation task force.

§ Lord Hanningfield
My Lords, I, too, congratulate the noble Lord on his birthday. I believe that everyday is a birthday at the moment when dealing with the Local Government Bill. I add my support for further action on flats above shops. A great many towns in my own county have vacant flats above shops. With the new effort to provide much more affordable housing, it seems that many communities could add to the number, particularly for young people. It would also regenerate our cities and towns.
I was pleased to hear what the Minister said, but could not the Government do more? The task force suggested that flats could be built above the properties. 1484 The Government could do more to encourage the use and the building of flats above commercial properties in towns where we need more housing.

§ Lord Rooker
My Lords, the policy is mixed-use development because that keeps the city centres alive, cuts down crime and reduces car use. There are a host of advantages. Building over shops is one thing, but there is a potential for 300,000 homes in existing empty spaces above commercial promises. Originally, it was living space, but in many cases that was not so. I have had my ears bent about this matter: there are some legal problems. The major property owners do not want to become landlords other than of the retail outlet which has the premises. The outlet does not wish to become the landlord. That is why the lessons from the project for living above shops should be taken on board on a national level. It is recognised that there is a need for an intermediary to deal with the landlord arrangements so that neither the retail tenant nor the property owner is involved in that aspect because it is not their business and they wish to do other things. We want to encourage them to make better use of the properties. Building above retail units and building mixed developments are part of the policy which we are trying to pursue.

§ Lord Ezra
My Lords, the noble Lord referred to the potential for 300,000 homes to be recovered from empty premises above shops. Taking empty properties as a whole, can the Minister indicate what their contribution could be if they were brought hack into use for future housing needs?

§ Lord Rooker
My Lords, I was referring to empty properties in terms of empty dwellings. There are at least 80,000 in London. There are probably a few hundred thousand in the country as a whole. One must be very careful about the figures one gives because the snapshot taken of empty dwellings includes dwellings which are being bought and sold and all kinds of other arrangements. There may be as many as 400,000 empty dwellings, 80,000 of which are in London. We have proposals as regards dwellings left deliberately empty—I am not speaking about second homes or anything of that kind—not to confiscate them. but to do what we can to encourage their return to use. We shall be producing proposals on that in due course.