Industry News
Increase in empty homes hidden by holiday lets ‘flipping’ ruse
£200bn worth of empty homes sitting vacant across Britain
Research by a leading lettings and estate agency has found an estimated £200bn worth of property is sitting vacant across Britain’s housing market - up 2.1 per cent on the previous year alone. Barrows and Forrester analysed
Government data on the number of vacant dwellings across each area of the property market as well as the average value of these dwellings, to reveal how much this dormant bricks and mortar is worth in current market conditions. With an estimated total of 665,628 vacant
residential dwellings, England is home to by far the highest total value, worth an estimated £190bn in the current market. Regionally, London is home to the highest
E
mpty homes being recorded as holiday lets by owners who want to avoid paying council tax on them is to blame for an apparent drop
in the numbers of vacant properties recorded across the country. Te group Action on Empty Homes claim that
without this practice of ‘flipping properties’ the number of empty homes recorded nationally is actually 20 per cent higher than it was five years ago. According to AEH the number of long-term
empty homes (vacant for more than six months) has risen from 200,145 in 2016 to 238,306 in 2021. Tis means long-term empties are now at their highest level since 2012, if the exceptional rise during the housing market shutdown caused by the pandemic (2020 data) is ignored. Te group is drawing attention to the data ahead
of its national focus on what it terms as ‘this wasted resource’ during Empty Homes Week 2022, which this year is taking place from 28th February to the 6th March. Tis year there is an emphasis on retrofitting empty homes and bringing them back into use for social rent and genuinely affordable housing. While national totals released by Whitehall
appear to show the number of ‘second homes’ falling by around 10,000 in the latest 2021 data, AEH claim that true figure actually rose as over 11,000 second homes had flipped their status to show them as holiday lets. In places such as Cornwall, AEH says that as many as 1 in every 18 properties are unavailable either by virtue of being a holiday let, second home or being leſt empty in the long term. Homes classified as holiday lets are no longer part of the residential property council tax base and
instead become liable for business rates. However, AEH estimate that the owners of as many as 96 per cent of such homes can avoid paying local taxation altogether due to generous business rates discounts introduced by the Government. Tis scheme ostensibly designed to protect small
local businesses is now being exploited by the owners of more than 67,000 properties in England which are now classified as holiday lets. Adding these to the national total of 253,000 second homes means that across England the second homes and holiday lets market has sucked over 320,000 homes out of residential supply. Will McMahon, director of Action on Empty
Homes, said: “In the last five years we have seen an escalating housing crisis while the number of long- term empty homes and second homes keeps rising. Tis year’s figures seemed to show second homes numbers dropping at a time when communities around the country were reporting the opposite – now we know why. “It turns out this isn’t happening at all, they are
just switching to business rates in huge numbers to dodge council tax and avoid penalties for being kept empty. “Today there are nearly 100,000 families and over 120,000 children stuck in overcrowded and insecure temporary accommodation because of a shortage of social housing. Yet over half a million homes have no one living in them because they are either long- term empty or are used as holiday lets.” While around 1million homes currently have no-
one living in them, over 550,000 long-term empty homes, second homes and holiday lets are without residents in the long-term, he added.
6 | HMMFebruary/March 2022 |
www.housingmmonline.co.uk
total value of all English regions, with 80,295 empty homes worth an estimated £41bn. Te capital has also seen the largest annual increase in vacant dwellings stock, up 12 per cent in the last year. Te South East and East of England also
rank high, with an estimated £36.2bn and £22.9bn worth of vacant dwellings across their respective markets. Te North East is home to the lowest
total value of vacant dwellings of all English regions, but even still, its 43,735 empty homes are estimated to be worth £6.5bn in current market conditions. In Scotland, the total value of
vacant dwellings sits at almost £8bn, while Wales is home to the lowest total value at £5.2bn. Across Britain as a whole, the 735,095 homes believed to be empty total just over £200bn. Managing Director of Barrows and
Forrester, James Forrester, commented: “We currently find ourselves in the middle of a property market boom and huge levels of buyer demand and insufficient stock to satisfy this hunger for homeownership have pushed house prices to record highs. “While there’s arguably never been a better
time to sell, there remains a huge number of homes sat empty across the nation and the value of these vacant properties is quite staggering, to say the least. “Of course, there will be varying
reasons as to why these homes are empty but they could certainly go some way in addressing the current housing crisis and bringing a much needed stock boost to the market.”
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