A recent study by the Leeds Building Society has revealed that there are 248,633 homes classed as “long-term empty properties” in England, meaning residential properties that have been unoccupied for six months or more. All told, this figure represents an increase of 4.8% over the past year.
Amidst the backdrop of the cost of living crisis and the fact that recent research from Shelter has shown at least 271,000 people have been recorded as homeless in England, returning these empty homes to the housing market must become a priority.
As we look forward, various remedies have been proposed, including Propertymark's efforts to revive the Empty Homes Community Grant Programme. Not only will this initiative address the very pressing housing needs of so many families and individuals, but it will also create economic benefits for landlords and the Private Rented Sector (PRS).
With a robust public desire and substantial demand to reintegrate the UK's vacant properties into the housing market, a number of potential solutions have been put suggested to achieve this goal.
The UK’s empty homes in numbers
As has been highlighted by researchers, the number of empty lets in England is astonishing. Almost a quarter of a million properties lie vacant across the United Kingdom. And whilst representing a loss of revenue for PRS landlords, empty properties won’t generate rental income. After all, there’s an urgent need to house families and people who find themselves in need of habitable accommodation.
The aforementioned figure of 248,633 vacant properties could contribute significantly towards housing the homeless population (271,000 people) in England when you consider that multiple family members would live within one home.
Why are there so many empty properties?
According to RICS, the volume of empty properties in the UK can be partially explained by factors such as probate, inheritance and elderly owners moving into residential care. Considered normal market processes, this is to be expected. However, RICS notes other causes of vacant properties in England that can be seen when examining the three types of long-term empty lettings.
Highlighting the analysis undertaken by the charity Empty Homes (EH) in 2018, the first point to make note of is that 37 out of 53 English local authorities where 1.2% of properties were classed as (long-term) empty properties, are located in the north of the country. This points to a geographical divide when it comes to uninhabited private rented sector housing, possibly widened by the cost of living crisis.
Secondly, Empty Homes state that it has seen a link between communities with “high levels of empty homes and where industrial decline over recent decades has caused substantial job losses”. Whilst housing is still sorely needed in these areas, there is a disparity between what people can afford and the rental market prices.
Finally, there is a willingness among people to relocate across England in order to find good-quality affordable housing, even if that housing is in low-demand areas. This points to a national housing crisis where the supply of habitable homes is causing a lettings crisis despite properties already existing.
Therefore, every property is an asset that could be put to better use than standing empty, with any sound initiatives having the potential to modernise the private rented sector for the twenty-first century.
Another reason that Inventory Base has previously covered is the departure of swathes of private landlords from the PRS, due in part to legislation that some landlords might view as restrictive. Before their properties are sold, they could sit vacant on the market for more than six months, therefore, qualifying as empty properties.
Discover more on this subject by reading our articles Why UK landlords are quitting the private rented sector and Renters' Reform Bill: What You Need to Know. Returning vacant lettings to be inhabited is a vital strategy to offset this loss of rental stock in the private rented sector.
What are the reactions to 250,000 empty properties?
Clearly, this situation is far from sustainable moving forward, especially given the cost of living crisis and rising mortgage interest rates. People require homes whilst landlords, and lettings agents, in turn, need tenant income to continue operating.
To rectify this situation, Propertymark has written to the Secretary of State for Levelling Up, Housing and Communities, to ask the Government to restart the Empty Homes Community Grant Programme.
Ending in 2015, an applicants’ guide from January 2012 stated that this scheme allocated funding to tackle long-term empty properties, which would otherwise not find their way back into use without some form of financial intervention.
One part of the UK Government’s strategy to tackle empty lettings and address housing issues was the allocation of £100m for the 2011-2015 Affordable Homes Programme. It sought to deliver 3,300 affordable homes across this four-year period. Yet, this financial assistance has not been extended.
Driving Propertymark to take action, it has requested that PRS supply issues are reduced to ensure that avenues become available for people and local authorities to buy, lease or refurbish empty homes as another route to providing affordable housing. The widely-respected UK property agents’ membership body believes that a number of long-term incentives, like discounts or exemptions to property tax, will go some way to incentivising English councils and property owners to bring properties back into use.
Propertymark advocates solutions such as removing VAT on home and energy efficiency improvements, along with discounts or exemptions to Council Tax and Stamp Duty when empty properties are bought and used.
What are the possible solutions?
Looking to the future, there have been several remedies suggested apart from Propertymark’s drive to return to the Empty Homes Community Grant Programme. So what can be done to return the UK’s empty lets back into homes?
Look to the Welsh Government
Inspiration could come from across the Welsh border. In January 2023, Property Industry Eye reported that the Welsh Government “could see up to 2,000 long-term empty properties brought back into use”. Julie James, the Welsh Climate Change Minister announced that £50m would be used to bring more empty properties in Wales back into use.
With more than 22,000 properties sitting empty long term in the country, James aims to increase how many properties are available to rent. Noting that otherwise, vacant lettings mean a “wasted housing resource” that could in effect become a blight on the communities they are in. The principle of issuing a grant on properties that have been empty for at least a year could theoretically be replicated in England.
It is also interesting to note Propertymark’s view that with 200,000 or so empty homes in the UK, creating homes from empty properties for people to live in saves a lot of materials compared to building new homes, bringing a sustainability slant to the debate.
England's approach to using empty homes appears rather puzzling, especially considering the UK Government's ambitious goal of constructing 300,000 new homes annually by the middle of this decade. Propertymark has highlighted this issue, raising concerns about the inadequacy of the Government’s efforts in managing the existing underused housing stock.
Retrofitting empty properties
Retrofitting an empty property is another approach that has merit. Introducing new materials, products and technologies into an existing building to reduce the energy needed to occupy that building has the potential to return more housing stock to the private rented sector.
Examples outlined by the Government include insulating roofs, walls and floors; replacement windows; improved ventilation design; airtightness works and more efficient heating and hot water systems. Architect Paul Testa states that “renewables are also often installed during retrofit works” which is significant for many. A higher standard of property is also claimed to attract responsible tenants and help a home stand out from competing properties.
The Big Issue advocates this solution, claiming that the UK is “trapped in a housing crisis” and that fixing the issue doesn’t just come from building thousands of new affordable homes, but also bringing empty homes back into use.
Among the many benefits of retrofitting, the most attractive given the current focus on energy prices is lower energy costs for tenants, thus providing a warmer and more energy-efficient home. If enacted across all of the UK’s empty homes, it would contribute towards lowering the nation’s carbon footprint, too.
Martese Carton, the director of mortgage distribution at Leeds Building Society, believes that whilst providing new homes is essential, the society’s research demonstrates that it is not the only path to a solution and that there is a “growing sense that these empty properties could provide some of the solutions to the housing crisis the country faces”.
Occupying once-empty homes benefits everyone
All of these viewpoints differ in their methods, with some saying retrofit, and others asking for more new builds. However, the consensus is that solving the UK empty homes crisis will have significant benefits for the entire country, not just among private landlords, letting agents and those looking to rent a home.
Another noteworthy advantage, which holds particular significance in today's world, is that repurposing and using these empty homes could aid the Government in achieving its net-zero target while also providing a refuge for families and people who are struggling to secure permanent, safe housing.