A mortgage lender has labelled the UK’s growing number of empty homes, of which there are more than half a million (676,452), “a national disgrace”.
Leeds Building Society’s mortgage distribution director, Martese Carton, has said there is a growing sense that these empty properties could provide some of the solutions to the housing crisis the country now faces.
“The lack of housing supply has been a major factor in the rapid house price increases we have seen in the UK over the past few years,” said Carton.
“The UK government set itself a target of building 300,000 new homes a year, but the last time this level of annual house building was achieved was 1977.”
Regional split of empty properties in 2022
Region | Current number of empty properties (% increase/decrease from 2021 in brackets) |
|---|---|
North West | 101,778 (+1.3%) |
South East | 99,829 (+3.8%) |
London | 89,508 (+2.0%) |
Yorkshire/Humber | 75,283 (+3.2%) |
West Midlands | 72,048 (+4.2%) |
East | 69,990 (+5.6%) |
South West | 66,839 (+7.8%) |
East Midlands | 59,581 (+4.0%) |
North East | 41,596 (+1.7%) |
Total for England | 676,452 (+3.6%) |
Source: Department for Levelling Up, Housing and Communities
The cost of homeownership in the UK has been driven up by uninterrupted house price growth, compounded by a lack of new housing relative to demand, over many years.
This means that now, full-time employees could typically expect to spend around 9.1 times their workplace-based annual earnings on purchasing a home, versus 3.5 times their salary back in 1997, according to the Office for National Statistics.
While house price growth has slowed in recent months along with a significant dip in house sales, many in the industry believe true change will be made through housing policy.
Last month, secretary of state for levelling up Michael Gove told The Sunday Times he wanted to scrap leasehold rules in an effort to reduce the fees charged by building agents to flat owners.
But planning reforms - what many have said is the key to fixing the UK’s housing supply and the cost of homeownership - have continued to be kicked down the road.
Last November, Leeds Building Society published a public policy paper looking at how the government could tackle the UK’s homeownership crisis.
Part of the report looked at how the country could make use of its existing housing stock.
“There is little doubt that the refurbishment and repurposing of old, or empty properties, makes great financial, economic, and social sense as it could provide affordable homes for hundreds of thousands of people,” said Carton.
“Although the current number of empty properties is a national disgrace, there is a growing sense that these empty properties could provide some of the solutions to the housing crisis the country faces.
“We also know that for many people, empty properties can be a blight on local communities.”
In August last year, Leeds Building Society said it would no longer offer mortgages for second homes, saying they simply “lie empty” and are not contributing to the economy at a time when housing stock is running critically low.
The lender’s chief executive, Richard Fearon, told FTAdviser that he did not think second homes were compatible with the business' purpose, which was to put home buyers first.
Breaking down the numbers
There are currently 676,452 empty homes in England, an increase of almost 23,500, or 3.6 per cent, over the previous 12 months, according to government figures.
Of these, 248,633 homes are classed as long-term empty properties, having been empty for over six months.
The number of empty homes in England peaked in 2008 at over 738,000 and then gradually reduced until 2017 when the numbers started to increase again. The UK is now back at the level of empty homes last seen in 2012.
Homeless charity Shelter estimates that the UK needs over four million more homes.
Reasons for home lying empty include inheritance, need for repairs, delays to redevelopment, a lack of funds for redevelopment, and owners simply holding onto property in the hope price rises in their local markets.
The national campaigning charity, Action on Empty Homes, is calling for a new national strategy on empty homes along with the creation of a national fund to support councils in bringing tens of thousands of long-term empty homes back into use.
Leeds Building Society told FTAdviser this was not new, and that the country has had a national empty homes fund before.
“It was highly successful, and it breathed new life into thousands of empty properties and helped regenerate numerous neighbourhoods,” the lender said.
ruby.hinchliffe@ft.com
