THE urgent need to build more homes is exercising industry experts, homeowners
and officials across the country. Undersupply is blamed for fuelling the
massive price rises in recent years, which have pushed home-ownership out of
the reach for many. But, as the Government cajoles housing associations,
developers and councils to get three million new homes built by 2020,
questions are being raised about the number of buildings that lie empty. The
Government signalled its determination to tackle the issue in the
Chancellor’s PreBudget Report, which promised measures to help to bring
empty homes back into use. Details of the scheme were sparse. Bricks and
Mortar spoke to industry experts to find out what it means for householders.
How many empty properties are there? The Empty Homes Agency estimates
that there are 840,000 empty homes in the UK. National Land Use Database
figures indicate that a further 420,000 homes could be established in
disused commercial properties in England, including former pubs and space
above shops. This adds up to more than one million additional homes – which
would make up a third of the Government’s three million target.
Why are so many properties left empty? Sadly, information on who owns
these buildings and why they have fallen into disuse is patchy. The job of
monitoring empty properties and bringing them into use falls to local
councils, and until recently there was little incentive for them to devote
resources to the task.
The Empty Homes Agency points to two main causes. Many homes remain empty
because they are in a very poor condition – perhaps needing a new roof – and
the owner is unable or unwilling to spend the money to put things right.
Once a home is empty, its condition can quickly deteriorate, pushing the
cost of making the home habitable still higher.
Another factor is speculation, where a buyer has bought a property for its
investment potential but does not wish to find tenants. David Ireland, chief
executive of the Empty Homes Agency, says that this is a growing problem,
especially in the new-build market, which has attracted “buy-to-leave”
investors who take the view that keeping the property empty will extend its
new-build premium. House prices in recent years have made this worse, as
generous capital appreciation has reduced the need of some buyers to secure
rental income.
What is the Government doing to bring empty homes back into use? The
Chancellor introduced three initiatives: An extension of the VAT reduction
that applies to work on the renovation of empty homes. Experts describe the
current difference in VAT rates between new-build (0 per cent) and
refurbishment (17.5 per cent) as perverse. Now a property will need to have
been empty for only two years, down from three, for the owner to be eligible
for the discounted VAT rate of 5 per cent for refurbishment. Local
authorities will be encouraged to reduce the 50 per cent council tax
discount on empty homes, which gives owners a financial incentive to keep
their properties vacant. The inclusion of homes that are returned to use
within the Housing and Planning Delivery Grant system, which gives financial
incentives to councils that meet housebuilding targets.
Local authorities will get the same reward for bringing homes back into use as
for encourageing new-build development. However, the Chancellor also said
that councils will no longer have to keep a register of the empty homes
returned to use. The Government says this will reduce bureaucracy but, as
David Ireland says, “how can you reward a council once you remove the empty
homes target?”
Should I be worried that an empty property will attract crime? This is
a major problem. Once a little thing goes wrong (such as a broken window),
crime and vandalism, including fly-tipping, escalate. Arson is a major
problem: the London Fire Brigade estimates that one in every four fires they
attended last year were in empty homes.
So, will I be able to get help to do up my empty property? Local
authorities are to decide how they spend their Housing and Planning Delivery
Grant – some may prove willing to help individual homeowners.
Is squatting a problem? There are no official figures. Experts say it
is no more of a problem than in the past. And in certain circumstances the
taking over of a building by “professional squatters”, who may look after
the property and make it secure, may reduce vandalism and crime. But many
squatters will leave a property in a far worse condition – and will prove
incredibly hard to evict.
Does an empty property bring down neighbouring house prices? Sellers have complained about this. A Home-track study in 2003 reported that, on
average, a property next to an empty house sells for 18 per cent less than
one that is occupied.
What can I do if there is an empty property in my street? Inform your
local council, which has the power to place an empty dwelling management
order (EDMO). If the council is not helpful – it may even be the owner of
the property – a local campaign could work. Visit www.emptyhomes.com
to read about successful local campaigns.
THE STEPS THAT YOU CAN TAKE
AN EMPTY home is an asset at risk. It should be making you money, not causing
expense. Empty homes deteriorate rapidly, attract vandals and are more
costly to insure, not to mention eventually repair. So if you own an empty
property, here are your options. If the property is in good condition you
could:
Act as landlord and let it yourself, or through a private rental agency
(contact the National Approved Letting Scheme, www.nalscheme.co.uk).
Fees vary from agency to agency. In some cases, you can let your home
cheaply in exchange for your tenant agreeing to complete certain minor
refurbishment work, but ensure that you have a watertight agreement in
writing.
Let your property through your local council under a private leasing scheme.
You grant a lease on your property for a certain number of years and the
council acts as managing agent. You would be responsible for external and
structural repairs, maintenance and building insurance. Councils usually
charge one month’s rent a year, but details vary.
Let your property through a housing association under similar conditions to
those listed above. To find out more about both options, contact your local
council’s empty property officer.
Sell your property to a housing association under an “existing satisfactory
purchase” scheme. The advantage is a relatively quick sale and a saving on
estate agency fees.
Sell your home on the open market. If your property needs renovation you
could:
Seek a grant from your local council for refurbishment costs in exchange for a
lease on the property.
Approach your local housing association. Some will pay either full costs or a
percentage of refurbishment costs in return for a lease at a reduced rent.
See if your property is dilapidated enough to qualify under a housing
association’s purchase-and-repair scheme.
Sell your home by auction. Contact the Royal Institution of Chartered
Surveryors (www.rics.org ) for a list of
local auctioneers.
THE SCANDAL OF BRITAIN’S EMPTY HOMES
Do you have an empty house in your street? Does it make you angry? Send in
your photos and we’ll compile a “rogues’ gallery”. And while you’re at it,
let us know your solution to the problem at: timesonline.co.uk/property
