Britain’s population is both growing and the age profile is getting older. These are just two of the factors contributing to an overall shortage of housing. Yet the government’s own figures reveal that although:
- only 115,000 new homes were built during the year 2009 to 2010 (fewer than at any other time since the 1920s);
- there are still 635,000 dwellings in England standing empty, and nearly a quarter of those have been empty for longer than six months.
These figures alone suggest the importance of making use of any empty property as a home – for yourself or for letting to tenants. So, why are so many homes still empty and what is likely to be involved in returning them to valuable places in which to live?
Why are they empty?
The campaigning charity Empty Homes suggests a number of reasons why a dwelling may be left empty for longer than six months:
- the property might have been inherited – solely or perhaps with other members of the family – and there is uncertainty whether to move into it, sell it or let it to tenants;
- although an empty property might have been bought with the intention of renovating it, the work has been shelved because of pressures of time or money and the necessary building work has come to a halt;
- some owners may be holding on to an unoccupied dwelling in the hope that it may realise a higher sale price in the future – or else they may be holding out for a sale at too high a price; or
- a landlord may have let the property in the past but is unable to afford the expense of those repairs and maintenance required for letting at present.
Whatever the reasons for the property currently lying vacant, any owner is likely to be well advised to ensure that it nevertheless retains the protection of adequate and appropriate insurance – in this case, empty property insurance, a niche product available from specialist providers such as ourselves at Cover4LetProperty.
Returning the empty property to use
It is widely recognised that the long-term vacancy of housing is a waste of a valuable resource. Many dwellings remain empty because their owners lack the funds needed to make them habitable once again. Government funding is available, therefore, to stimulate such housing being brought back into use and resources are allocated to local authorities for application in ways in which they see fit.
The Greater London Authority, for example, makes available some £60 million as incentives in pursuit of its goal to ensure that no more than 1% of homes in the capital remain empty and uninhabited for longer than six months.
Each local authority has its own scheme for the use of such funding and the policies designed to stimulate the return of empty property to the housing stock. Many offer a range of services and advice relating to funding that may be available for renovating empty properties, advice on ways in which such renovations may be carried out, opportunities for letting the renovated property, or for its sale.
In the area covered by Stratford-on-Avon District Council, for example, Empty Property Assistance Grants are available for individuals intending to carry out renovations to bring empty property – that has been unoccupied for longer than six months – back into residential use.
The Grants are worth up to £20,000 and may be applied in cases where the empty property is situated in an area defined by the council as being in housing demand and already with an established community of such facilities as shops, transport links and schools.
If the Grant is taken up, the Council reserves the right to nominate occupation by tenants from its own housing waiting list for a period of five years following completion of the renovation work.
Renovation in practice
As with any residential building works, the renovation you may be planning for an empty dwelling might require the separate consents of planning permission and compliance with building regulations. If any such applications are necessary, it clearly makes sense to enter into early discussion with the local authority’s planning department to ensure the acceptance of your plans.
You may typically also need renovations insurance, too. (Read our Guide to renovating here).
A further financial incentive for anyone planning to return an empty property into residential use is the discounted rate of VAT that your builder and other tradesmen may charge.
If the property has been empty for at least two years prior to your beginning the renovations, HM Revenue and Customs (HMRC) allows contractors to charge you VAT at the discounted rate of 5% (instead of the standard 20% on building works). If the property has been empty for the previous 10 years, VAT may even be zero rated.