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Empty homes scandal is not what it seems

With the announcement of the government’s housing strategy last November, the world of new homes enjoyed plenty of publicity. Now, it appears, the light is shining on the problem of empty dwellings and what to do about them.

Housing minister Grant Shapps keeps going on about them, there was all the publicity around Empty Homes Week in early December and, most tellingly of all, the property doyens of Channel Four – in this case George Clarke and Phil Spencer – have waded into what is dubbed a scandal.

And on the face of it, good for them.

It’s not a difficult argument to make, and it goes a little like this: “Hey! We’ve got thousands of homeless people and only build, say, a hundred thousand new homes a year.

You can’t force people into areas that they don’t want to live in – which is where most empty homes are

“Meanwhile, at least 200,000 new households are created every year and there’s all these empty homes sitting vacant. Why not use them?”
On that reading, it does indeed feel like a scandal.

But, as with most aspects of housing, things aren’t quite as straightforward as George, Phil and the gang are making out.

For a start, let’s look at those all-important statistics, which are at the heart of the story. On closer inspection, they do rather dampen down the spirit of the whole thing.

According to the latest figures from Empty Homes – formerly the Empty Homes Agency, the number one charity dealing with the issue – there are some 930,000 unoccupied homes in the UK.

But as of November 2011 only 350,000 – just over a third – are classed as long-term empty, meaning they have been vacant for more than six months.

The rest are merely temporarily vacant, meaning that their owners have a plan for them – whether it is due to a gap in tenancy, having just taken on the property through an estate or even because the owner has moved out while they are doing it up. These are not exactly homes you’d think it was reasonable for anyone to occupy forcibly any time soon.

Let’s look even more closely at the statistics. Talking specifically about England, which has some 730,000 homes classed as empty, 657,000 or so are in the private sector.

Now, it’s fairly simple to understand how those 73,000 empty homes – 10% of the total – that are owned by councils and housing associations can be turned around and brought back into some use.

But the overwhelming majority are in fact privately owned – which makes doing something about them a legal and logistical nightmare.
And unfortunately, this is where it begins to fall down as an argument.

According to Empty Homes, the advice on bringing an empty private dwelling back into use goes as follows: find out who the owners are and then see if they’re interested in selling. Bingo. But even tracking down the owners isn’t easy because, by definition, owners of long-term empty homes are not likely to have any interest in the local area or be readily contactable at the present time.

There are, of course, some powers that local authorities have been granted to get involved in the private sector.

The 2004 Housing Act allowed local authorities to make Empty Dwelling Management Orders, which created quite a lot of controversy at the time, but basically enabled councils to put tenants into empty homes without the owner’s consent. Sounds great in principle, but it is in reality an incredibly complicated process, involving bags of preparation for serving an interim EDMO, dealing with any tribunals, and then serving final notices, and so on.

It’s massively legalistic and applications can get rejected very easily by the tribunals that decide on how to proceed – often for minor transgressions of the process.

As an idea it works brilliantly, but in reality it’s a nightmare.

According to the best figures to hand, fewer than 100 EDMOs have been served successfully so far. It’s hardly making waves.

Having established then that it’s incredibly difficult and bureaucratic to get anything done about long-term empty homes in the private sector, are we actually sure that we want to bother anyway?

The housing market is far from perfect, but usually works quite effectively in matching supply with demand.

In broad terms, if a house becomes empty in a part of the country where people want to live, it has a much better chance of being turned around than in an area that suffers from high unemployment and low housing demand.

Homes are obviously more likely to be used in areas with higher housing demand, meaning you can’t force people into areas that they don’t want to live in – which just happens to be where most of them are.

It’s difficult to generalise from the regional figures published by Empty Homes, but the percentage of a town’s homes that are empty varies from 1-6% – and it’s usually the case that areas experiencing greater economic suffering are at the higher end of this band.

There is also the matter of the two elephants in the room when it comes to housing issues in the early 2010s – energy use and cost.

Ask any housebuilder and they’ll tell you that it’s easier to build a ’green’ house from scratch than it is to upgrade an existing one.

And they will add that by the time you’ve actually upgraded the walls, floor and roof with insulation, installed efficient glazing and improved existing heating and plumbing circuits, in many ways you might as well have knocked it down and started again anyway.

In terms of build cost, obviously the cost of bringing an empty home back to life depends hugely on the state it is in. In many cases, demolition and rebuild is likely to be the most prudent solution.

So it seems clear that the problem of our empty homes is not quite as easily solved as we have been led to believe.

In many ways, the problem is more easily explained this way – we have thousands of homes available in parts of the country where there isn’t enough demand to fill them. And doing anything about bringing them back into use would be fiendishly difficult.

That’s not a scandal – it’s just the nature of the complex housing market in which we operate.

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  • Paul Palmer 11th January 2012 at 4:31 pm

    So that’s it then? just because empty homes are in areas where people don’t want to live, and are more trouble than new builds to bring back into use, we should give up?
    Local Authorities need to take tougher action on long term empties.
    I train local authorities up and down the country, and they simply need a little education on all the tools available to them, and a recognition from Central Government that it is ok to take way a home form someone who is not using it, to give it to someone that wants it!.

  • Mark H 11th January 2012 at 3:03 pm

    A good article very sensible and balanced. @nonny 3.45 yes the current ECo regs are a problem and do add to build vcsot, but not as much as some of the proposed solutions add to the householder’s costs going forward e.g. whole house heat recovery ventialtion- a nightmare!
    what really stuffed starter homes for FTBs though was the introduction of Part M of the building REgs int resudential build by the ’97 Blair government. The added a wheelchair accessible graound floor toilet to all houses, Queue the death knell of the 2 bedroom new build house. By the time you have made it wiide enough for the diabled WC you have a house that will take three bedrooms on the first floor. So the modern copies of the old 2 up 2 down house can no longer be built.

    Every time government interferes in the marketplace for houses it adds to the problems not to the solutions.

  • Mark H 11th January 2012 at 3:03 pm

    A good article very sensible and balanced. @nonny 3.45 yes the current ECo regs are a problem and do add to build vcsot, but not as much as some of the proposed solutions add to the householder’s costs going forward e.g. whole house heat recovery ventialtion- a nightmare!
    what really stuffed starter homes for FTBs though was the introduction of Part M of the building REgs int resudential build by the ’97 Blair government. The added a wheelchair accessible graound floor toilet to all houses, Queue the death knell of the 2 bedroom new build house. By the time you have made it wiide enough for the diabled WC you have a house that will take three bedrooms on the first floor. So the modern copies of the old 2 up 2 down house can no longer be built.

    Every time government interferes in the marketplace for houses it adds to the problems not to the solutions.

  • DCM 10th January 2012 at 5:26 pm

    Good article, generally correct. I accept the point of Anon 3:45, but, lets face it, empty property officers throughout England have balked at doing EDMOs. They have done few Complusory Purchase Orders, not a lot of Enforced Sale and enforcement. I feel if empty properties are the problem we all say they are then LA’s would take more action with legislation that exists than the have done.

  • Mark Reynolds 10th January 2012 at 3:45 pm

    A very interesting article. I know builders who have stopped building new homes purely because of the extra costs now involved due to the extra regulation for renewable energy. I understand this can add around 10% to the build cost. I have been in some new homes and the insulation is so good in some, that even in winter upstairs windows need to be opened to cool it down.

    Surely regulation should be relaxed (just slightly) to get builders building again. Just think how this could help our economy. The regulation could then be increased once we are out of this economic darkness.

  • alan 10th January 2012 at 2:42 pm

    Having acquired an EDMO soon after they were introduced I believe that the admin isn’t too onerous, the Tribunal can be unpredictable but the main stumbling block is the need for the LA to find the renovation costs up front (In this area about £10-15,000 per property). With current financial cutbacks getting money from accountants to give as interest free loans to missing landlords is nigh on impossible and when the Government do offer funds to bid for, the terms and conditions are very restrictive. A central pot of money (bank) for LA’s to borrow from and repay over the life of the EDMO would be beneficial to the housing lists as well as employing small builders and, with a bit of imagination, trainee tradesmen.

  • Nick Long 10th January 2012 at 11:50 am

    A very good article on the difficulties LA’s face in tacking empty property -however once a council has completed its first EDMO the more confident it often become. My authority in Lewisham is very active in using EDMO’s and the threat and application of an EDMO is often all that is required. It is likely LA’s will be using these powers more as grants and loans dry up.