Given the focus on the shortage of affordable housing, it’s surprising that there are thousands of empty properties around the UK, many of which could make great homes. Here, we explain how to find one, bag a bargain – and even get money towards doing it up
There are around 700,000 empty homes around the UK. While a good proportion of these are just temporarily vacant, the estimated figures for long-term empty properties – those that have been empty for over six months – are still high at approximately 271,390. In England, there are 205,293; in Scotland, 37,135; in Wales, 27,000; and in Northern Ireland, 1,962.
There are several reasons why homes are empty. Chris Bailey, campaign manager for charity Empty Homes, says that while some expensive flats bought solely for investment purposes by overseas landlords or investors are left empty, the vast majority of properties are empty because of ordinary financial concerns.
“One of the most common reasons that properties are empty is because the owner cannot raise the money to do the property up to let it out, or sell,” he explains.
“Perhaps they previously rented it out and it now needs more works done to it or maybe they inherited it. Then there are those bought unseen at auction as investments; these can prove challenging and may require more working capital for refurbishment than the buyer has available.”
For those seeking to find a cheap property to buy, it’s certainly worth considering such properties. With so many spread around the country, there is a good chance that there is an empty property near you. Moreover, with no residents or tenants, it is likely to need some remedial work and may therefore be priced to reflect this.
“You may need a broker to find a lender willing to lend on an empty home”
How do you find empty properties?
You will have to be prepared to do some research to find empty homes in your area. If you live near an empty property, there may be a gardener or occasional visitor whom you can approach. Alternatively, a neighbour may know something about it. You can even drop a note through the letterbox giving your contact details, explaining that you are potentially interested in buying the property.
Estate agents are also worth contacting as they may know of a local flat or house that needs rescuing or have one languishing on their books that needs work.
Alternatively, you can try to obtain information from the local council about the property. Many have an empty property officer, who may be able to tell you more about an empty property you’re interested in or about other empty properties in the neighbourhood. If the property is embroiled in a planning dispute, the local authority planning office should have a record of any planning applications registered to that address.
As many local authorities have schemes to try to get empty properties back into use, they may be able to trace the owner and pass your details on to them. However, there are limits to what they can do for you as there are data protection guidelines that need to be adhered to.
Once you’ve identified a potential property in England or Wales, you can carry out of a search for the empty property’s owner on the Land Registry’s website. For only £3, you can then download a Title Register providing this information. For properties in Scotland, you need to contact Land Searches Scotland. Strangely, in Northern Ireland you need to physically visit a Land & Property Services customer information centre or write in.
Online auction catalogues are also a good place to find empty properties for sale. For instance, Savills Auctions publishes its catalogues two weeks before a sale and allows those interested to attend a viewing before the auction.
“Online auctions are a good place to start”
Buying the property
It’s crucial to make a proper assessment of any property before you buy, as Mr Bailey points out: “If it’s cheap, there is a reason.” Therefore, it’s advisable to get a full structural survey done, as it should pick up costly defects such as subsidence.
Some councils, such as Kent County Council, provide interest-free loans to help get empty homes refurbished or converted into good-quality residential accommodation. Rhondda Cynon Taf County Borough Council in Wales even provides grants of up to £20,000 for owner-occupiers to renovate an empty property they’ve purchased – an invaluable aid to first-time buyers.
Getting a mortgage
Cash buyers obviously have an advantage when buying empty properties requiring work, but if you need to borrow funds there are many options available.
If the property is run down but habitable (has a working bathroom and kitchen) and needs only minor improvements, a standard mortgage is an option. However, many lenders may only lend up to 80% to 95% of the current value of the property and may withhold some funds as a ‘retention’ until works are complete.
If the property is not habitable, you may need the help of a mortgage broker to find a specialist lender willing to lend against it. David Hollingworth, London & County’s spokesperson, advises that owner-occupiers contact a lender such as the Ecology Building Society or Buildstore Mortgage Services.
“A stage-payment mortgage is most suitable if the property is not habitable, or you need help to fund the property purchase and improvement works,” says Rachel Pyne, director of financial services at Buildstore Mortgage Services.
“Your borrowing capacity is not limited by the current value of the property. You can potentially borrow 85% to 95% of the property purchase and improvement costs, up to a maximum of 85% of the expected end value of your home when works are complete,” she adds.
Saffron Building Society offers buy-to-let mortgages for properties that are not immediately lettable and require light refurbishment (new kitchen, bathroom, rewiring, central heating or general decoration within three months of completion but not structural works).
Mr Hollingworth adds that investors can also consider a bridging loan to secure short-term funds for renovation works on a buy-to-let property. These are available from specialist lenders, such as Precise Mortgages or Shawbrook Bank.
Mr Bailey points out that if you’re taking on your first refurbishment project it’s worth bearing in mind:
“It’s crucial to do your research, expect some cost escalation and check the local market for comparative cost estimates by talking to reputable local builders, such as one that is a member of the Federation of Master Builders.”
Given the huge number of long-term empty properties in the UK, it is certainly worth keeping an eye out for a potential property bargain.
“We couldn’t afford to have the house lying empty”
A frequent reason for a property lying empty is a change in family circumstance, such as a death or marital breakdown.
When Ms Jones and her partner split up in early 2017, both moved out of their three-bedroom semi-detached property in Enfield, north London. Within a couple of months, the property was up for sale for £539,000. After a year empty, they agreed to switch estate agents and dropped the price, with the property selling in September for £440,000.
She explained: “The buyer definitely got a bargain as similar properties in the area go for much more, but we were forced sellers. With a mortgage and council tax to pay, we couldn’t afford to have the property lying empty.”
“Being focused on our end goal gave us the strength to carry on”
Victor Evans and Robin May (pictured left to right) both live in Dover and learnt from an estate agent of a local property that had failed to sell at auction.
They had previous experience of refurbishing properties and liked St Martins Yard in Lorne Road, Dover, so much that in 2010 they took out a £190,000, 100% mortgage with NatWest to buy it. The building, formerly used for car sales, had been derelict for 10 years.
Their aim was to transform the site over 18 months to provide family homes and flats for sale.
However, things didn’t go according to plan as obtaining planning permission from Dover Council took far longer than expected. Permission was only granted in 2012 for five houses and seven flats on the site.
By then, the original development loan from NatWest for a further £650,000 had expired. Fortunately, Kent County Council’s (KCC) ‘No Use Empty’ initiative stepped in to unlock phase 1, with an interest-free loan of £125,000 to develop the five houses.
After the houses were completed in June 2016, KCC then approved another loan of £425,000 at 5% interest to ensure the project completed, creating a further seven much-needed flats.
The homes, which are currently rented out, are now valued at £1.6 million and the KCC loan of £550,000 in total, is due to be paid back in March 2022. In addition, there is still around £160,000 of the original NatWest mortgage remaining.
Victor and Robin did 90% of the work themselves and spent £100,000 of their own money on materials over the years to complete the mammoth project.
Despite all the ups and downs, Victor told Moneywise: “Being totally focused on our end goal gave us the strength to complete the site.”
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Chris Menon is a freelance financial journalist and runs the investing blog Safestocks (Safestocks.co.uk)