One in four affected by 'empty homes'

One in four people (27%) have lived on the same street as an empty home. Those who have experienced living near an empty home claim the presence of the empty home has had a negative impact on the value of property (22%) and their enjoyment of the street (22%), according to Halifax research.

Potential buyers 'put off' by empty homes

A quarter of respondents felt that the presence of an empty home in their street had a negative impact on potential buyer's perceptions of the area. This is further compounded by the discovery that over a quarter, (26%) of people would be put off buying a property if there was an empty home on the street.

One in five believe empty homes attract crime

A fifth of respondents felt that the presence of an empty home in their street attracted crime.

House prices are 17% lower in areas with highest proportion of empty homes

The average house price in all 15 of the Local Authorities (LAs) with a high level of empty homes is below the regional average. The discount is, on average, £30,004 (or 17%). The largest discount is in Stoke-on-Trent, at £63,145 (34%).

High levels of deprivation in most areas with high level of empty homes

Twelve of the 15 LAs with a high level of empty private homes rank amongst the 20% most deprived areas in England, according to the government's Indices of Deprivation. (The Indices of Deprivation are produced by the Department of Communities and Local Government and rank LAs in England by a range of factors including income, education, health and living conditions.)

Nearly 290,000 empty houses, despite a 6% fall

There has been a 6% fall in the number of empty homes in England over the past three years. However, there were still 288,763 empty homes in England as at April 2006, 1.6% of all privately owned dwellings in England. This is down by 19,675 from 308,438 (1.8%) in April 2003.

Little use of Empty Dwelling Management Orders by local authorities

Empty dwelling management orders (EDMOs) were introduced in July 2006 and give local authorities the power to take control of empty private homes and bring them back into the housing stock. However, only 6 EDMOs have been granted since July 2006 and none of these has been granted in an area with a high level of empty homes.

VAT discount extended to properties that have been empty for more than 2 years

New build properties are not liable for VAT on construction costs. Until recently the cost of restoring an empty home attracted the full rate of VAT (17.5%) unless the property has been vacant for more than 3 years when a reduced rate of VAT of 5% applies. This has recently been extended to properties empty for more than 2 years. A property vacant more than 10 years, which is renovated and sold, attracts a zero rate of VAT.

Restoring an empty home could attract VAT of more than £5,200 Halifax estimates the average cost of restoring an empty home is £29,824 and involves significant repair to many aspects of a house including plumbing, kitchen, windows, roof and wiring. On this basis the average VAT payment for restoring an empty home vacant less than 2 years would be £5,219. This is three and half time more than the VAT for restoring an empty home vacant for more than 2 years, which would attract an average VAT payment of £1,491.

Halifax calls for further action against empty houses…….

Halifax issues the following calls to action to the government designed to encourage and reward the renovation of empty houses.

Halifax calls on the government to extend the reduced 5% rate of VAT for restoring an empty home to all properties vacant for more than 6 months, not just properties vacant for more than 2 years. This will provide a more level playing field between individuals and local authorities. Typically, local authorities do not pay VAT on renovation activities.

Local authorities adopt various approaches to council tax reductions for empty homes. Halifax calls for a unified approach. Buyers of empty homes will receive up to a 50% discount for a maximum 12 month period, up to six months of which can be after renovations are complete. This will encourage people who take on an empty home to re-introduce them into the housing stock within a 12 month period.

Halifax proposes that the above discounts will only apply if the owner makes the property their primary residency, finds a lodger, OR sells the property within a 12 month period.

Jaedon Green, head of mortgage product development at Halifax, commented: "The number of empty homes in England has fallen by nearly 20,000 over the past three years but more needs to be done. One in four people continue to be directly affected by an empty house which they believe has a negative impact on the value of property, their enjoyment of the area and levels of crime.

"Halifax calls on the government to extend existing VAT and Council tax discounts to encourage the renovation of empty houses, thus making them homes.

"Rising property prices encourage the rejuvenation of empty homes in many parts of England. However, it is clear more direct action is needed in areas with high levels of empty homes as these are often deprived areas. In these areas councils need to make more use of Empty Dwelling Management Orders and consider removing the council tax discount for empty homes."