Filling empty homes: the key to flourishing communities?

16^th November 2015

Common in much discussion on the housing crisis is the focus on the need for a range of solutions. From building on the green belt, to stopping foreign investors and ‘buy to leave’; from unlocking brownfield land for development and leaving the green belt out of it, to bringing all empty homes back into occupancy. It was this latter point that was the focus of a roundtable I attended last week, hosted by the Nationwide Foundation.

The discussion gave focus to the other side of the coin: that the housing crisis is really a series of crises, a fact reflected in the particular issue of empty homes. There’s a lot of demand in London and the South East, and an oversupply of homes (many of which stand empty, deteriorating) elsewhere. So any solution must be tailored to local need – which is why ResPublica called for Local Place Partnerships, to bring communities together to meet local housing demand, in our recent Devo Home report.

This is particularly true of empty homes. London only has 29,000 long-term private empty homes; the North West has 61,000. London however has 53,000 second homes; the North West has 19,000. Different types of homes are empty for different reasons in different regions – so what may work in London won’t elsewhere.

What’s also overlooked in discussion of empty homes is the link between unoccupied properties, the sustainability of communities and their sense of place. After all, existing housing stock is important to our sense of belonging, local memory and identity. Bringing homes back into use will only meet some of our housing need, but it can significantly improve urban environments. With empty property rates higher in deprived areas, this can help address the unequal access to urban beauty we identified earlier this year.

What’s unclear is what we do about homes empty for a range of reasons – from mortgage defaults to family break-up to buy to leave. We argued for VAT relief for refurbishments in our Right to Beauty report – but we have seen from the range of measures introduced since 2010 that fiscal incentives alone are not enough to tackle empty homes.

Instead, we need local areas to take the lead. The LPPs we proposed in Devo Home, given a remit to tackle empty homes, would help. Local people – engaged earlier in the planning process and empowered through a community right to beauty – would be able to engage in efforts to better use and upgrade existing housing stock and in doing so would be less inclined to resist new development. And LPPs would be able to work with local authorities and housing associations to identify local empty homes prime for refurbishment, and possible commercial sites also suitable for residential planning permission.

LPPs could also set up devolved housing investment funds to provide resource – to individuals and local groups – for refurbishment work. Loans could be offered interest free in return for a share of the uplift in value generated by work – either through lease income or sale funds. In doing so, they would be able to replace grants ended by central government while funding work according to local need.

There are a number of possible funding sources that could accompany such a value capture mechanism.  Taxing luxury foreign housing purchases would tackle empty home issues in London while providing funding to be distributed around the country. Part ownership schemes – where the fund part purchases an empty home with the local community and thereby receives a share of the value uplift when the property is sold on – could prove fruitful.

Specifics aside, it’s only by recognising the local nature of the problem that we can begin to tackle it. Solving the empty homes problem can only make a small contribution to tackling the housing crisis, but it can bring important wider benefits to local communities around the country.