289,000 homes vacant in England

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by Kay Murchie

According to the Halifax bank, there are 289,000 houses that have been empty in England for six months or more. This figure exceeds the Government’s proposed housebuilding targets of 240,000 new homes each year.

The majority of vacant homes are generally in rundown areas and are left vacant by absentee landlords, or as a result of disputes over ownership, or developers who have run out of cash.

Just a few orders have been granted to take control of vacant properties since new guidelines were introduced 18 months ago.

The amount of vacant homes has declined as property prices have increased but the amount of empty properties does not match the rapid inflation cost of a home.

According to the Halifax index, the cost of the average property increased by 34% from £134,500 to £179,800 between April 2003 and April 2006 whereas the amount of vacant homes declined by 6%.

The housing shortage has been blamed for the significant increase in property prices but many say building targets have boosted an over-supply of city centre flats and an under-supply of family homes as developers seek to meet them.

This claim was backed up by a recent report by the Government’s independent housing experts the National Housing and Planning Advice Unit, which said building should target family homes, rather than smaller properties, or housing affordability would deteriorate.

This report has been issued by the Halifax to coincide with Empty Homes National Week of Action, which starts today. Martin Ellis, chief economist at Halifax, said it is encouraging that the amount of vacant homes in England has fallen in the last few years but it is also notable that the problem has worsened in many areas with the highest number of empty homes. Increasing property prices encourage the rejuvenation of empty homes in many parts of England.

Mr Ellis added that they would like the Government to extend the 5% rate of VAT for renovating an empty home to all properties empty for over 6 months not just those properties that have been unoccupied for over 2 years.

The average cost of renovating an empty home, including essential repairs, new roof cover, new windows, a fitted kitchen and redecoration totals nearly £30,000 according to the Halifax.

The current 17.5% VAT bill for for homes empty for less than 2 years is £5,220, while a 5% bill would cost £1,490.

The research also established that 12 of the 15 local authorities with a high level of vacant properties were in the 20% most deprived areas in England. Consequently, investors and homebuyers are less likely to invest cash into renovating empty properties in spite of property prices being 17% lower in these areas.