As the Council of Mortgage Lenders has previously pointed out, even if the government managed to push the building industry into producing 300,000 homes across the UK each year, 90% of the housing stock that will exist by 2025 has already been built. If we are to tackle the housing issues we face, it’s not just down to increasing the rate at which new developments spring up – we need to make far better use of the houses we already have, too.
The first step needs to be addressing the number of empty homes currently sat, completely unused, across the nation. Recent research suggested that there are now around 200,000 empty homes in the UK, with around 20,000 in the capital alone.
Turning these unloved properties into homes that people could be proud of would make a massive difference. It’s surely easier to turn 200,000 properties that already exist into something habitable than to produce 200,000 new homes from scratch.
Why are these homes empty?
There are a host of different reasons why a perfectly good property may end up being empty for a long period. A common issue is the lack of a will when someone dies. If it isn’t clear who should take ownership of the property, then the probate process can take years. With no-one taking up residency of the property for years, it can easily deteriorate in quality.
Even if there is a will in place, the death of the owner can lead to problems. The charity Empty Homes has said that it’s not uncommon for children to inherit a property, but find themselves without the money to do it up before selling it on or unable to do so due to an emotional attachment to the property.
Money issues hold back other owners of empty properties too – landlords who previously let it out but don’t have the funding in place to perform necessary maintenance, for example.
Certain areas are particularly susceptible to having a higher concentration of empty homes too, such as parts of the North, the Midlands and seaside towns. According to Empty Homes there is often a “vicious cycle” in play, where areas with a number of empty homes also suffer from high levels of deprivation and a poor standard of general housing.
Who wants to live in a ghost home?
An obvious problem with some of these ‘ghost homes’ is that in their current condition nobody would want to live in them. They may have been ignored for years, falling into disrepair to the extent that they may actually be unlivable.
But these are exactly the sorts of properties that savvy investors may be looking for, the worst house on the street which can be done up, turned into a nice, respectable home and then sold on at a profit.
It’s why we launched our refurbishment product earlier this year. We have had numerous borrowers come to us over the years, having spotted a great opportunity, a property that needed some love and attention but could be turned into a fantastic home. High street lenders won’t touch those properties, but short-term lenders are much more experienced and comfortable working with investors on these sorts of projects. A dedicated refurbishment loan made sense.
Transforming empty homes
However, relying on investors to spot the potential offered by an empty home, and lenders who are prepared to fund that refurbishment on the right property, is clearly not enough.
Turning empty properties into desirable homes requires government help, from speeding up the probate process to ensure that empty homes end up on the market quicker, to investment in those struggling areas which are most likely to see empty homes fall into disrepair.
A joined up approach, combining assistance for developers looking to produce new housing and investors who see the potential to transform empty and unused properties into homes, can make a much more significant difference to the housing shortage than focusing on new builds alone. It would also provide support to areas that really do need it the most.
Whoever takes up the housing brief after the election needs to ensure that the opportunity offered by renovating empty homes does not go ignored.