THE archetype of “property porn” is a Georgian townhouse, painstakingly
maintained but also kitted out with every modern convenience, a blend of
Gaggenau kitchen appliances and Farrow & Ball-painted original cornices.
But some people’s pulses race at the sight of an empty house – Georgian,
Edwardian, Modernist, whatever – in need a thorough makeover. The scope for
such feelings is now considerable. There are 840,000 empty properties in
Britain, to be found in smart and scruffy neighbourhoods. The derelict house
on an otherwise spruced-up street is a familiar sight. Some properties
included in the empty dwellings figures are new-build flats, purposely left
untenanted. But most have suffered years of neglect, usually at the hands of
their local authority owners.
There is a growing sense that these properties should provide some of the
solution to the housing shortage, providing affordable homes for first-time
buyers and others. It is, after all, kinder to the environment to refurbish
an old property than build new homes on green-belt land. Last week’s Autumn
Budget seemed to promote this strategy. Local authorities will receive the
same reward via the Housing and Planning Delivery Grant for bringing an old
terrace back to life as for building a flat on a new estate.
But the perverse incentives that ensure that so many properties remain empty
will continue for the moment, although it is under review. The private
owners of such homes may still receive a 50 per cent council tax discount.
The Autumn Budget changes would seem to provide little incentive to buy and
fix up an empty wreck. But councils can decide how to spend their cash. They
may look kindly on an application for funds from an individual who has
fallen for a home that has fallen on hard times.
As in all affairs of the heart, a little boldness can pay off; you will not
necessarily be disqualified on grounds of income. You will also enjoy the
warm feeling that your new neighbours will be in your debt: homes next door
to empty derelict properties sell for an average of 18 per cent less than
similar homes elsewhere.
SLOWDOWN OR SLUMP?
Most of the 15 (it’s a crowded sector) regular UK house price surveys continue
to forecast slowdown or stagnation. But the view from Washington is bleaker.
The International Monetary Fund is forecasting a US-style slump for the UK
market.
Among other things, its gurus point to the performance of house prices since
1997: the average house price is up over the past decade from £68,777 to
£198,898. They contend that just 60 per cent of this increase can be
justified by such factors as rising incomes: there is no explanation for the
other 40 per cent, suggesting a state of delusion and potential for a
correction. In short, the market is like a cartoon character that steps off
a cliff and starts to fall only when he realises that he is walking on air.
At the same time, the IMF’s experts concede that their analysis contains
“considerable uncertainties”. These include factors that have boosted and
should continue to support prices, such as the shortage of homes and demand
from immigrant workers.
Even the gloomiest UK commentators could not be won over to the IMF’s
pessimism. Sub-prime lending is the principal cause of the US market’s woes:
borrowers with poor credit records were given loans they could not repay and
are now finding their homes being repossessed. Sub-prime lenders also
flourish in the UK and their customers are more vulnerable to repossession
than other homebuyers.
But this is a small-scale business compared with the giant US sub-prime
industry. Its watchdogs also seem to have been not in the least concerned
about its activities. For the sake of the health of our housing market, we
hope that our watchdogs are being more vigilant.
HAVE PRICES GONE UP IN SMOKE?
The smoking ban has produced several lifestyle changes. People who like a
cigarette have now become the outsiders, lurking around the entrances of
offices, or standing by pub doors, whatever the weather. A few are
“smirting”, that is flirting while smoking, while others are shouting to
make themselves heard over the hubbub. In the commercial districts of city
centres these congregations can lend an agreeable whiff of café society to
streets that used to fall silent every evening. But in residential areas
these crowds can seem more like riotous assemblies, producing noise and
litter.
As a result, it is becoming harder to sell a house close to a pub or bar.
North London estate agents say that such proximity can reduce a price by as
much as £50,000. This presents the opportunities for property bargains,
provided you can shrug your shoulders at cigarette butts tossed into your
front garden and the sleepless nights that come from intoxicated youths
singing She’s So Lovely or some other current hit at the top of
their voices outside your bedroom window.
anne.ashworth@thetimes.co.uk
Perhaps prices around pubs should just be a lot less but the housing bubble has people buying just anywhere to get onto the property ladder.
Jack Stuart, London,