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A new scheme aims to bring England's empty homes back into useBy: David Ireland

The National Empty Homes Scheme aims to make vacant property useful againOur country’s population is growing faster than our housing stock. The human consequences of this are profound. With greater demand on each house, prices have gone up, meaning many people have to settle for smaller homes than they would like and an increasing number of people on lower incomes have been priced out altogether. Added to this there is increasing pressure to zone more open land for development.

The maddening truth is that whilst all of this is going on there are over 700,000 homes in England and over 900,000 homes across the UK standing empty. Many are dilapidated and derelict, but the majority are actually in quite reasonable condition. A new bathroom suite, new kitchen units or fixing a few bits of disrepair might be all that is needed to get another house onto the market, and back into use.

Recent surveys have shown that the average empty house only needs about £10,000 spending on it to make it habitable.
That doesn’t sound like a lot of money to create an additional home, but unfortunately for many owners it’s money that’s currently hard to find. Most empty home owners are ordinary people who may have inherited the house or bought it in the past as an investment. They don’t have thousands of pounds lying around in cash and borrowing the money they need from high street lenders has become increasingly difficult.

That’s why it was so important to create a specific empty homes loans fund that filled the gap. A relatively small amount of money could bring thousands of homes back into use. Repayments would go back into the fund creating a revolving loan fund that can go on lending for years. George Clarke the TV presenter architect and campaigner agreed and he made it a major part of his Great British Property Scandal campaign that was broadcast on Channel 4 in 2011 and 2012.

The campaign was successful and last year the government agreed to provide the lending capital to set up the National Empty Homes Loans Fund in England. The governments in Scotland and Wales have also set up their own empty homes loan funds and Northern Ireland is developing its own fund too. This means that for the first time an owner of an empty home anywhere in the UK has at least one option for funding a refurbishment and getting it back into use.

The National Empty Homes Loans Fund provides small loans of up to £15,000 per home, at a fixed interest rate of 5 per cent. This should be enough to fund the refurbishment of an average empty home. The fund opened in September 2013 and has seen an amazing level of demand. The first loan has already been approved and renovation work has started, so the property could be let and have new residents moving in within weeks.

Lending money to get empty homes into use is may not be in the business plans of the big High Street lenders, but it has real benefits to local economies. A home returned to occupation helps owners create a rental income that repays the loan and also enables the owner to maintain the property. That not only stops derelict eyesores appearing on the streets, it’s also a great way of putting money into the local economy. A large proportion of the builders bill is labour meaning that the money goes straight into creating and maintaining local jobs.

Most importantly bringing an empty property into use creates another home. The country’s housebuilding rate is the lowest rate it has been for a generation, and most people agree that it is not providing enough homes to meet the housing needs of the county’s rising population. Bringing empty homes into use helps fill the gap and provide homes that people need.

It’s a condition of the National Empty Homes Loans Fund that owners commit to renting the resulting home at an affordable rent. This still provides a good rental income for the owner, but ensures that the home is available for people on modest incomes who may otherwise be priced out of the housing market.

Bringing empty homes into use won’t solve the housing crisis by itself, but it can make a significant difference with other local benefits as well. It is hoped that the new loan funds will help overcome the lending problem, which many owners have experienced, and be the spur to getting wasted assets back working for everybody again.  

About the author

David Ireland, Chief Executive of Empty HomesDavid Ireland OBE is the Chief Executive of Empty Homes

Features October 2013

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