Time to tackle the UK’s empty homes
There is no denying that the UK is in the midst of a housing crisis, with a severe shortage of housing stock. In response, Chancellor George Osborne has unveiled plans to build more than 400,000 new homes across England by 2020, as well as new measures to encourage developers to build affordable houses.
But at a time when demand continues to considerably outpace supply, this lack of homes is currently forcing house prices upwards.
The Royal Institution of Chartered Surveyors (RICS) recently warned that values are expected to rise by 4.5% a year for each of the next five years – a cumulative increase of around 25%.
Simon Rubinsohn, chief economist at RICS, says: “It’s hard to get away from the issue of supply when it comes to the current state of the housing market. The legacy of the drop in new-build homes following the onset of the global financial crisis is now really hitting home, with both the sales and letting markets continuing to show demand outstripping supply on a month-by-month basis.”
The Confederation of British Industry warned last year that to satisfy current levels of demand, 240,000 new homes need to be built a year. And yet the number of new houses built has only topped 200,000 four times in the past 14 years.
The government may have pledged to build 400,000 homes in England by 2020, but campaigners are asking why better use is not being made of the hundreds of thousands of empty homes across the UK.
Government figures suggest there are currently more than 610,000 empty homes in England. Of these, 200,000 are classified as ‘long-term empty’ (empty for more than six months). This represents 0.88% of the country’s housing stock.
Separate recent research from national campaigning charity Empty Homes, along with Aldermore Bank, shows the highest recorded proportion of homes that are long-term empty in England are in the North East (1.34% of the region’s housing stock), followed by the North West (1.27%) and then Yorkshire and Humber (1.15%).
A report by the charity calls for the government to re-establish dedicated funding for local authority areas with high concentrations of empty properties to enable more homes to be brought back into use, as part of a wider approach to regenerating neighbourhoods.
The report also asks the government to support the creation of at least a further 20,000 affordable homes from long-term empty properties by 2020 across England. It is envisaged that the government would need to invest about £450 million over the next five years to achieve this.
There are concerns that without dedicated empty homes grant funding, bids to create affordable homes from long-term empty homes across England could lose out to bids for large-scale, new-build schemes.
The Empty Homes charity believes that both building homes and creating new homes from empty properties should play a role in tackling the UK’s housing crisis.
“With so many people priced out of decent housing across England, there is an imperative to make the most of the empty homes we have in all parts of England,” says Helen Williams, chief executive of the charity. “This needs to be done alongside building new homes that are within the reach of people on low-to-ordinary incomes. We need political parties to give priority to bringing empty homes back into use.”
Williams adds: “We believe we cannot afford to waste such properties, given the shortage of homes across England. Properties that currently lie vacant could play a more important role in meeting housing demand. While there is clearly a need to build new homes, ignoring the potential of empty homes in meeting housing supply is a costly environmental mistake.”
She says that creating homes from empty properties saves substantial amounts of materials over building new houses, and minimises the amount of land used for development. “Refurbishing empty homes can also help improve the look and feel of neighbourhoods,” she adds.
Charles Haresnape, group managing director of mortgages at Aldermore Bank, agrees: “The lack of housing supply is the biggest challenge facing the housing market today. To meet current demand, we need to take a two-pronged approach: refurbishing empty homes and bringing them back into use, combined with building new homes.”
While further findings from the Empty Homes charity show that London has the lowest percentage of long- term empty homes (just 0.6% of the city’s housing stock is recorded as long-term empty), the capital has its own issues to contend with.
London's absentee homeowners
In London and the South East, there is a big problem with absentee homeowners leaving properties purposely vacant, knowing their value will eventually go up.
Kate Faulkner, managing director of property advice site Propertychecklists.co.uk, says: “In London, many individuals purchase homes but then leave them empty, seeing this as an opportunity to ‘hang on’ for future capital growth.”
In a positive move, the Greater London Authority says it is committed to bringing the capital’s long-term empty homes back into use to help provide homes for Londoners.
This includes ensuring that no more than 1% of homes stand empty for more than six months, improving the information available through a London- wide audit of long-term empty homes, and encouraging the removal of financial incentives to leave homes empty.
Mayor Boris Johnson is also investing £60 million from the Targeted Funding Stream to bring empty homes back into use.
But while the government insists it is investing to bring empty homes back into use not just in London, nationwide, campaigners feel there is more to be done.
“There are nearly 3.5 million homes in London, and around 57,000 of them are known to be empty,” says Sian Berry, London mayoral candidate for the Green Party.
“That may be a lower proportion than in the north of England, but it’s still a shocking number in real terms. What’s even more shocking is that these empty properties would house London’s 25,000 homeless families nearly twice over. I want councils to use empty property enforcement orders to bring these empty homes back into use. Everyone deserves a roof over their heads and if there are properties going to waste, it’s up to politicians to take action to put them to good use.”
Councils could do more
In 2013, the coalition government gave councils more power to levy taxes on empty homes to incentivise bringing them back into use. Since then, councils can charge up to 150% of council tax on homes empty for more than two years.
However, housing charity Shelter says many councils are not yet using these powers to their full potential and adds that giving councils greater discretion to charge higher rates of council tax on long- term empty houses could further incentivise their re-use.
Earlier this year, Shelter’s chief executive Campbell Robb said that while homes shouldn’t stand empty, moves to bring them back into use would not alone offer a solution to the housing crisis: “The simple fact is that even if every single empty home was put back into use, it still wouldn’t solve our chronic housing shortage.
“The only way to fix our housing crisis for good is for politicians to stop just talking about the issue and finally commit to the action that will build the affordable homes we desperately need,” he said.
While bringing empty homes back into use may form only part of the solution to the UK’s housing problem, it is certainly an issue that the public feels strongly about.
A study carried out this time last year by Halifax and the Empty Homes charity found that more than three- quarters of British voters want to see stronger action by politicians to tackle the problems of empty homes.
According to the research, 78% thought the government should place a higher priority on tackling empty homes, while 74% wanted their local authority to do more. A third of people said empty properties blighted their local area.
Why are there so many empty homes?
While some empty properties – and particularly those in the capital – are owned by ‘buy-to-leave’ investors who deliberately hold a property empty and off the market, in anticipation of a rise in its market value, what’s the story behind some of the other empty homes across the UK? Here are common examples:
- A landlord may have been rented out a property in the past, but it now needs a lot of work before it can be let again. The home may be left vacant if the landlord is unable to find the money to get the work done.
- Sometimes a property may be unoccupied if someone has inherited it (perhaps jointly with another family member) and is unsure whether to sell, rent or move into it.
- A property may be vacant if the owner has bought the place with the aim of doing it up, but then has taken a long time to complete the works. This may be due to the pressure of other commitments or financial constraints.
- Certain empty properties may belong to homeowners who are in hospital or abroad.
- While some properties are to some extent ‘stuck’, others have been abandoned.
How you can help
Empty Homes Week took place last month, celebrating local achievements in bringing empty homes back into use and setting out its future plans. For more information on its campaigns, visit Emptyhomes.com.
Equally, if you are interested in bringing a home back into use, check out Youspotproperty.com, which offers a reward for spotting an empty or derelict property. If you report a property to the site and it meets its criteria, you will receive a £20 gift voucher for Marks & Spencer or other stores, plus 1% of the purchase price if it helps bring the property back into use. A £500 donation will also be made to a local charity.
Confederation of British Industry
The CBI promotes the interests of its members, some 200,000 British businesses, a figure that includes 80% of FTSE 100 companies and around 50% of FTSE 350 companies. Formed in 1965, it’s the lobbying organisation for UK business on national and international issues and seeks to influence the UK government to help businesses compete effectively.