Investment in Empty Properties Could Help to Ease the Housing Shortage

Investment In Empty Properties

Property Mark has stated that new incentives should be offered to property developers to encourage them to invest in vacant housing. Across the UK, there are thousands of empty properties, which could effectively help ease the ever-growing housing shortage.

The trade body, which represents property professionals such as estate agents, letting agents, and auctioneers, has called on the government to re-instate the ‘Empty Homes Programme’, which ended in 2015 after having distributed £100 million.

Property Mark has also asked the government to consider the removal of VAT on home improvements, including home efficiency upgrades. They are also requesting that they look at offering discounts or exemptions on stamp duty and council tax for developers buying empty homes.

The trade body welcomed the government’s recently released Levelling Up White Paper, created to address this issue, but implored ministers to go a step further and “explore a scheme that targets owners of empty homes”. The recommendations are not entirely unlike the previous White Paper, which was created with the intention of giving local councils the power to enforce rules on owners to ensure that their properties are not left vacant long-term and for them to find suitable tenants.

How many vacant properties are there?

The number of empty homes is 20% higher than it was at the end of the previous national Empty Homes Programme. According to Action on Empty Homes, there are currently 238,306 empty properties in England, which is a figure not too far from the government target to build 300,000 new homes per year in an attempt to keep up with the ever-increasing demand for housing.

The government has missed its target by quite some distance, with only 228,370 new homes being completed in the year ending September 2021. The increasing demand for housing and the historically high lack of supply are serious problems for the property market.

“Empty homes are a wasted resource, and at a time when the housing market is in the grip of unsustainably low levels of stock for sale and for rent, it makes no sense that there are thousands of homes sitting vacant,” Timothy Douglas, head of policy and campaigns for Property mark, commented.

“We have long called for the reintroduction of a national programme of funding because of the much-needed incentive that it can provide to get these properties back into the market for would-be home buyers or landlords.”

He added: “The UK government has set itself a target of building 300,000 new houses a year, but it must not miss opportunities to do more to better manage the growing level of existing housing stock that is currently being underused, or not used at all.”

This week, from February 28th to March 6th, is National Empty Homes Week, which is an initiative to help councils identify and bring empty homes back onto the property market for rental or sale. With more than 260,000 properties in England sitting empty for at least 6 months, it is vital that councils address these issues to help increase supply.

As an example, the city of Salford has, at this time, 2,392 properties that have been empty for at least six months. The Salford Council has been actively working in conjunction with property developers and investors on a mission to bring these properties up to scratch and find tenants.

“Salford is in the midst of a housing crisis, and we take the issue of empty properties extremely seriously as we know that there are so many families and residents in our city that could make them a home of their own,” Deputy City Mayor Councillor Tracy Kelly, Lead Member for Housing, Property, and Regeneration, said.

She added: “Our dedicated team deploys a wide range of tactics to bring these homes back into use, and we have strong partnerships with local housing associations who help us refurbish them and find new tenants who are in need of a good-quality home.”

She continued: “We offer landlords a number of options to find a solution for an empty home, and we will not hesitate to use enforcement powers, such as serving improvement notices, to ensure the home is habitable. I would urge landlords to work promptly with our teams to ensure that properties can be ready for use as soon as possible.”

Salford Council is offering grants to landlords and investors in a scheme they have called the Private Sector Leasing Scheme, which provides assistance with the refurbishment and upgrade of properties to a liveable standard. The scheme requires a 30% contribution from the applicant and must be managed for a minimum of 5 years with affordable rental rates.