While politicians continue to fight over the need for additional homes in the UK it has been revealed that there are 610,000 empty homes in England alone with thousands more in Scotland, Ireland and Wales. Even the most ambitious of new build promises ahead of the last general election struggled to get over 100,000 a year but there is potentially six years worth of “new builds” in the form of empty homes. These properties are under the ownership of an array of different parties including councils, banks, private investors, companies, etc. So, is there anything that the authorities can do with these empty properties?
Repossession orders
Repossession orders have been discussed in great detail in recent times although it is difficult to run this kind of policy as well as a free market economy. Therefore, unless politicians are willing to risk the confidence of future investors in the UK property market it would seem that repossession orders would at best be a last resort. There may be an array of properties in a dilapidated state which could come under the control of various councils across the UK but this would be a precarious move by anybody’s standards.
Tax incentives
At a time when the OECD is looking to reduce tax incentives for those looking to invest in property (by reducing the tax deduction factor of interest on borrowed funds) perhaps this is the wrong route? There are many properties across England in particular which require significant investment that would in some cases be counter-productive when you bear in mind the local property market. What investor worth their salt would be willing to rebuild a property if there was a ceiling on prices in the area and they would be unlikely to get their money back in the short term?
So, perhaps we should now be looking towards councils across the UK to offer real incentives to those struggling to cover the cost of renovating run down dilapidated properties.
Social housing
The fact is that any property investor with a home which is unused or underused would find it difficult to reject any rental income. Maybe there is scope for councils to approach private homeowners with properties to let offering them tax incentives to complete renovations as well as guaranteed rental income, albeit perhaps at a slight reduction to market rates. This would potentially solve the problem of social housing requirements across the UK and indeed bring an array of new properties back into the active UK real estate market.
There is also the potential for councils to acquire empty properties which may need significant work therefore expanding their social housing portfolio and reducing the pressure on waiting lists.
Conclusion
It seems bizarre to hear of 610,000 empty properties across England, and more across other parts of the UK, when there is said to be a housing shortage. Surely between tax incentives and social housing guarantees there must be some scope for local authorities and investors to work together for the benefit of all involved?