Empty homes become a political issue again

February 22, 2013

Landlord Information

A local authority is reported to be taking action on the subject of the large numbers of homes that appear to be standing empty, even in a situation where housing is in chronically short supply.

In this case, the BBC report* refers to the situation in Norfolk, though the problem of empty property is widespread and affects most parts of the UK to one extent or another.

When reading the report, it perhaps isn’t immediately clear as to how the proposed initiative will deal with the problem.  The logic appears to be that by reducing the amount of discount offered in terms of council tax on empty properties, that somehow this will pressurise landlords into making their properties habitable and start to let them again.

Whilst there is a certain mathematical sense to this and the proposal has been broadly welcomed, including by landlords associations, given that the report also indicates that many properties have been standing empty for more than two years, the question must be asked as to cause and effect.

If a landlord has had a property standing empty for two years, there is presumably a very significant amount of capital tied up in the property that is not accessible and potentially the property is deteriorating at the same time. It is, essentially, a huge financial cost, even hidden, to the landlord and a veritable financial millstone.

True, the current exemptions from council taxes might be a factor in encouraging a certain degree of inactivity however, given the relatively modest sums involved with council tax, it is not immediately clear how ending these exemptions will be a sufficient incentive for the landlords concerned.

The reasons that a landlord is keeping a property empty may be many and varied, including perhaps having insufficient funds to undertake the restoration and renovation required in order to bring the property up to modern letting standards.  Some are questioning whether increasing the annual running cost of such properties to the landlords concerned, is likely to better enable them to get their properties restored and on to the market.

If you have a property standing empty, do not forget that you might need to seek let property insurance quotes which are valid for the provision of unoccupied property cover. A typical standard landlords’ policy might only cover a property that sits unoccupied, if it remains in that condition for less than somewhere between 30-45 consecutive days.

So, the actions in Norfolk will be watched with interest to see whether or not they do indeed make any significant difference to the large stock of empty property that is such a concern to all involved.

Source:

*http://www.bbc.co.uk/news/uk-england-norfolk-21169664

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