Anybody home?
That abandoned house halfway down your street is part of a much larger problem than meets the eye. Kate O’Raghallaigh takes a look at Britain’s empty homes.
The lights may be on, but in more than 800,000 empty homes across the UK, there’s nobody home. Far from being an isolated and relatively minor problem, empty homes – which are officially classed as such if they have been vacant for more than six months – are a massive problem in the UK. With 288,000 classified as ‘long-term empty’, that is, vacant for more than six months, the issue has also begun to attract significant attention in light of the shortage of housing supply in this country.
According to figures from Halifax, more than a quarter of people have lived on the same street as an empty home. The effect of this, unfortunately, isn’t just limited to having someone else’s weeds growing over the adjacent garden fence. The housing market doesn’t exactly take the ‘beauty is on the inside’ approach to valuing houses in the vicinity of abandoned properties and as a result, living near an empty home can reduce the value of your property by as much as 10%, according to the Empty Homes Agency.
Further statistics from Halifax show that house prices are 17% lower in areas with the highest proportions of empty homes. This is also due to the fact that, aside from being something of an eyesore, empty homes also serve as a breeding ground for squatting, arson, illegal dumping and anti-social behaviour – all of which contribute to the degeneration of a local area and lower house prices.
But why are so many homes lying empty? One of the main problems is inertia, according to Henry Oliver, policy adviser at independent campaigning charity the Empty Homes Agency. He explains: “There are many reasons why homes in the UK become empty and while it would be unfair to generalise, a lot of them are empty simply because their owners just don’t know what to do with them. People may have inherited a property with structural problems, or could have started building work which went wrong and affected the habitability of the house, or ran out of funding halfway thorough. In any case, homeowners’ circumstances change, and they feel like they have run out of options.”
Supply and demand
So how do empty homes fit in with the Government’s aim to address the shortage of housing supply – surely Gordon Brown’s plans to build three million new homes by 2020 could be helped by bringing unused property back on the market?
The cost of renovating a house is significantly cheaper than building a new one however, and this is where the issue of empty homes becomes significant within the wider housing supply debate. The cost of building a property from scratch is £212,850, according to website Propertyfinder. The potential for empty homes to accommodate people in need of housing cannot be ignored, according to Ellis. He says: “If you look at the shortfalls that occur with the Government’s housing targets and consider the number of empty homes throughout the country, restoring empty homes instead of building new ones could certainly help to relieve the country’s housing shortage, although it will never be the only solution.”
Bringing empty homes back to life, however, is also a long and arduous process. Figures from Halifax show the average costs of fully renovating an empty home to be approximately £29,000, however in some cases it can cost as little as £8,000, according to the Empty Homes Agency.
Currently, owners of properties that have been empty for less than two years are charged 17.5% VAT on renovation costs, while homeowners whose properties have been empty for more than two years are charged a reduced rate of 5%. Martin Ellis, chief economist at Halifax, says this rate needs to be widened if more owners are to have a real incentive to restore their empty properties. He says: “We would like to see the 5% discount extended to all owners of empty homes, as this would improve homeowners’ motivation to get their houses back in a habitable condition.”
Oliver points out that the argument for restoring every empty home in the UK as a means of increasing housing supply is a somewhat simplistic one. He adds: “Looking at the figures for empty homes alone can be slightly misleading. This is because there is still unused space in commercial dwellings throughout the UK, as well as unused space above shops, which also have the potential to assist the housing shortage supply. This kind of marginal space is going to be up for grabs this year, although it is potential we run the risk of ignoring.
“Ultimately, there is a wider public interest to be served in bringing empty homes back to use – there is a moral imperative not to allow property to go to waste.”
Empty homes can cause a lot of problems for those who live near them. If you live near an empty home, or know of one in your area, report it to your local authority, or visit the Empty Homes Agency, who provide information on how to correctly identify, and report an empty home.
