The scandal of Britain’s empty homes

We’ve heard for years that house prices in the UK can’t fall because of the massive shortage of supply.

At Moneyweek, we’ve always said that supply had nothing to do with the bubble: that was caused by stupidly cheap credit and mortgage deals. However, that doesn’t mean that supply doesn’t matter. All other things being equal, the more houses there are the lower prices will end up being. 

That’s why Channel 4′s programme on housing supply last night was so very good. It looked at the total scandal of the UK’s million-plus empty homes – something we’ve been going on about here for years.

This is partly about bad general policy – low taxes on second home and so on – but it is also about the last government’s Pathfinder policy, which planned to take old houses out of use and replace them with new houses deemed to be more suitable for modern families. It managed the first bit, but not the second.

So what makes a new house better than an old terraced house? The councils says that people don’t want to live in two-up-two-downs with doors on to the street. But is that really true? Surely people with no home are more than happy to live in two-up-two-downs.

And why can’t a two-up-two-down be knocked together to make a four-up-four-down? Isn’t a small townhouse better than a B&B? And what of all the people who keep saying they want to live in these streets? We saw lots of them on the show.

The lady from the council was also very firm on the fact that people don’t like to step straight from their house on to the street. I guess she’s never been to Notting Hill or Mayfair. The truth is that knocking a couple of these houses together would make a rather nicer house than a good many of the new houses I have been in.

Then there is the cost of keeping all these houses empty while the councils wait for the money to demolish them: the city of Liverpool spent well over £1m last year on securing empty homes. That doesn’t seem a particularly good use of taxpayers’ money: there are 21,000 people waiting for a council house in Liverpool. 

Channel 4 is  starting a campaign on this to “stop this senseless waste”. I suspect all the rest of us do too. You can join the debate here.

• If you want to talk about this or anything else with me, why don’t we do it over lunch? Bid here

23 Responses

  1. 06/12/2011, Ellen wrote

    My first house was a 2 up, 2 down Victorian terrace in London. I was single and employed and I loved having a front door and back garden. Admittedly, I was in close proximity to the neighbours so, it may not suit everybody. But I liked it. Unless these old houses cannot be adapted to the way people live now, I see little point in getting rid of them, especially when there are limited alternatives.

  2. 06/12/2011, FC wrote

    It’s about time the myth of there being too few houses in the UK was exploded. 70000 empty homes in London alone, if I recall the programme correctly.
    However, was irked by the landlord who didn’t want to sell, but couldn’t afford to refurbish his empty home. Responsible thing for him was to accept his loss and sell. But instead channel 4 bailed him out.

  3. 06/12/2011, JAW wrote

    The scandal of empty homes (and empty commercial properties) can be solved by a simple change in the law… use it or lose it!

    It may be a difficult concept for property investors to accept, but in the interest of a fairer society and equal opportunity for all, we need a law which states that you cannot own a property which you do not actually use. Such a law should apply to individuals and companies as well as to governments, national and local. If you own something which you do not use you stop someone else from owning it and using it to the benefit of the economy.

    Unused properties would have to be put up for auction within 6 months of becoming unoccupied. This would result in lower property prices, wider property ownership, less homelessness, greater numbers of new business start-ups, lower business costs, and generally the economy moving towards its greater potential. The parasitic landlord class would be gradually phased out.

    Liberation of the British economy!

  4. 06/12/2011, alex wrote

    So where are these million homes, you can bet a large % are in the South Welsh valleys, and the North West and North East, as well as the Glasgow area of Scotland. Yes there are plenty of houses that are empty……. in areas where there are no jobs. That’s why people have been leaving those areas for several generations. You can buy a house in Merthyr for abou £15,000 in the right area, so why all the whinging on MW about high house prices? ……because the people who complain about house prices don’t want to leave the nice areas they live in with the well paid jobs, which is why house prices are high where they live. Jonahthan of Hampshire ( a frustrated FTB on £80,000 a year on another MW house price thread ) would do well to understand this. There are cheap houses and empty houses, just not mny of them in the South East.

  5. 06/12/2011, Colin Selig-Smith wrote

    Oh good lord. Stealing peoples houses from them in the name of fairness? Really?

    How about we sacrifice a couple of sacred cows instead.

    1. House prices are deliberately kept high through the planning regulations. Lets cut the planning departments.
    2. Green belts have to go. They’re corsets not belts. Squeezing prices higher.
    3. Land tax. Pay per square metre no matter the usage. Inflation linked. Got a big estate? Then you’ll have no problem paying for it.
    4. Cut the CAP! Oh my god. Farmers and land owners paid to do nothing.
    5. Cut the rail subsidies. Completely. Why should London bankers have their commutes subsidised?
    6. No council tax rebates for empty houses.

    These are real things we could do which will reduce demand and increase supply of housing and take us closer to a free market.

  6. 07/12/2011, theresa dowling wrote

    i’m a single parent living in private accomodation which is very expensive,one of the lucky ones, but would be delighted to get an old broken down house and cheap funding to make it a beutiful home.It is disgusting that there are so many homeless people in the uk and all these empty houses,something needs to be done would also delight in contributing to your campaign,helping people to re-obtain their dignaty.

  7. 07/12/2011, UnaPlanner wrote

    The channel 4 programme was useful in confirming middle class prejudice that a house with an Avocado bathroom suite is unfit for habitation.

    Good knockabout TV it might be, but not consistent with a serious discourse on the real issues.

  8. 07/12/2011, diannehughes wrote

    Thought provoking programme. But… at the end a beautiful new house was given to a family who have been homeless for many years and most of the children we felt sorry for had been born into homelessness. People need to take responsibility for own lives too and not sit back waiting for someone else to pick up the pieces. And.. the soldier who was still suffering from his time in Iraq – still homeless. There is no fairness here.

  9. 07/12/2011, P Lee wrote

    Mass immigration, particularly as most seem to move to London adds to this. When there is not enough housing and jobs for locals, this needs to stop

  10. 09/12/2011, NeutronWarp9 wrote

    As a civilized country the welfare system should provide a minimum standard of living to the vulnerable, but there is the rub – what does that mean? The issue of food, energy and clothing coupons are the solution. Degrading, say some. A freebie says me – and if I was in need I would gratefully accept it.
    Rather than give money to be mis-spent at the beneficiaries discretion, coupons would target spending.
    As for empty houses, bring the jobs (via expanded Enterprise Zones) and the problem will be all but solved. The BBC has frog-marched some of its staff norf and there is ample land to build new towns elsewhere. Incentivise businesses and people and they will come, but we should definitely not give free money to theresa-d et al (6). Thankfully, the workhouses have long gone, but the money-for-nothing culture should be stamped on.

  11. 09/12/2011, Bren wrote

    The ‘empty’ figures include houses for sale, look at the number of vacants for less than 6 months and its much less. PLUS private sector vacants have always been small as a % of the whole compared to all public sector bodies whose record is shocking

  12. 09/12/2011, Adam Ford wrote

    No doubt Clarke is well-meaning, but if he thinks the government will do anything against the interests of the bankers, he is sorely mistaken: http://infantile-disorder.blogspot.com/2011/12/great-british-property-scandal.html

  13. 10/12/2011, Peter Northamptonshire wrote

    By deliberately removing perfectly good houses from the housing market, house price inflation is reinforced, most of these houses would be on the market for £35000 – £40000, by doing this first time buyers are effectively priced out of the market, because the only properties available are too expensive, this seems to have been an organized plan, I’ve got no idea who, or why, but the fact that councils up and down the country are doing this looks very suspicious to me.

  14. 10/12/2011, Steve T wrote

    I bought my first 2 bed terrace house in Dartford, Kent in 1975, when I was on a civil service salary of around £1700/yr, for £10,000, having scrimped and saved for several years to get the 10% deposit together.

    The same house type now has an asking price of around £130,000 so for comparison the salary would need to be around 13 times £1700 = £22,000. The salary band for the grade I held in 1974 is now £21 – 24,000.

    Someone tell me, where is the difference between now and 1974?

  15. 10/12/2011, Maria wrote

    As a private landlady I would hope not to have my property empty
    for 6 months – but for various reasons it is possible. It is currently
    rented. it is where whole streets sit empty that is the problem.
    And some of these properties would not take a lot to do up.

  16. 10/12/2011, Ken Meredith wrote

    This and most other problems in Britain today could be very easily solved – Put a big sign up on the White Cliffs of Dover with the simple message “NO VACANCIES – FULL”

  17. 10/12/2011, Steve wrote

    Jaw your utopian dream is lovely. What you are actually saying however is that families who have outgrown their home but worked hard enough to purchase a second home should have the former property taken off them. As an evil landlord I currently buy repossessed properties, the common theme with each…the occupant had been in the middle of an elaborate refurbishment involving granite kitchen work surfaces and expensive bathrooms (and numerous flat screen TVs)…perhaps they should have been thinking about their mortgage payments a tad more. Isn’t it a shame more people can’t budget for a new home…
    The reality is huge sections of society cannot handle their finances, and cannot budget for ongoing upkeep of their homes. Meanwhile misinformed sections of society force an ever increasing debt burden by insisting they have ‘choice’ and of course their own property. I typically fork out £15K to bring my properties up to standard – if not an investor who do you suggest pays this?

  18. 10/12/2011, Critic Al Rick wrote

    @ 14. Steve T

    Quote: ‘Someone tell me, where is the difference between now and 1974?’

    I suspect the difference would be apparent if you compared private sector (PS) equivalents, rather than civil service (CS)grade I.

    It seems to me that much CS remuneration has increased proportionally with increases in GDP; whereas much PS remuneration has trended more towards trends in Balance of Payments (BoP), i.e. largely flatlined in real terms.

    As BoP is THE criterion for gauging the success of an economy it is more appropriate for changes in remuneration to be coupled to that rather than to changes in GDP. BoP relates to Profit, GDP to Turnover; Profit is Sanity, Turnover is Vanity.

    A lot of our economic woes would be negated if HPs and remuneration returned to pro rata mid-late 1990s’ levels. I suspect that PS remuneration (excepting pseudo cartels and virtual monopolies) would not be too dissimilar from present, but many civil servants would really feel the pinch.

  19. 10/12/2011, John S. wrote

    Colin Selig-Smith’s comments make the assumption that the value of the property you live reflects in some way one’s ability to pay taxes on it ! We moved into our present home 40 years ago when my earning power was at it speak. Spare time and cash (plus VAT) was ploughed into improving the property and long before I retired the property was worth twice what we’d paid for it, and we are assessed for tax on the current value not my (in)-ability to pay the tax from my much diminished pension which in no way has kept up with rising prices over the past 10 – 12 years. After half a lifetime here the last thing we want to do is leave our home even if selling it and moving house would release much if any capital. But we do need the green belts for health and environmental reasons. Not politically correct I know, but the Conservatives Poll Tax was much fairer !

  20. 10/12/2011, John S. wrote

    Colin Selig-Smith’s comments make the assumption that the value of the property you live reflects in some way one’s ability to pay taxes on it ! We moved into our present home 40 years ago when my earning power was at it speak. Spare time and cash (plus VAT) was ploughed into improving the property and long before I retired the property was worth twice what we’d paid for it, and we are assessed for tax on the current value not my (in)-ability to pay the tax from my much diminished pension which in no way has kept up with rising prices over the past 10 – 12 years. After half a lifetime here the last thing we want to do is leave our home even if selling it and moving house would release much if any capital. But we do need the green belts for health and environmental reasons. Not politically correct I know, but the Conservatives Poll Tax was much fairer !

  21. 10/12/2011, David S wrote

    Colin Selig-smith’s proposal for a land tax per square meter would have the effect of squeezing people into smaller and smaller spaces and is quite unacceptable. People want decent housing, not hovels. Britain urgently needs a population policy in an attempt to stabilise and ultimately reduce population numbers starting with an urgent reduction in the numbers of immigrants granted citizenship and the right to remain. The mass immigration of the last forty years has been a tragedy for our nation and for its environment and I cannot see what advantage it is to us or to our descendants to have sacrificed our living space to vast numbers of people from Africa, eastern WEurope and the Indian sub-continent.

  22. 10/12/2011, Douglas G wrote

    Colin Selig Smith seems to ignore the fact that some so called property developers or rather property racketeers are hoarding land to keep a stranglehold on supply thus raisng the value of the land which they then drip feed onto the market. There is also brown field land available but the developers want Greenfield because it’s cheaper for them to develop. Parasites.

  23. 12/12/2011, Dave wrote

    This is a topic close to my heart as I have been involved in social housing renewal projects over the past 30 years.
    It seems to me that the HCA who promoted the scheme to designate older houses as unfit and then compulsorily purchase them demolish and hand over the sites to developers was repeating the mistakes that the Labour party made in the 1950′s and 60′s of slum clearance and wholesale relocation of neighbourhoods into high rise blocks.
    On this occasion with those schemes that actually got completed It ended up with those owners who had scraped the money together over the years or had property left to them would be paid the market rate of around £50k for compulsory purchase and then if they wanted to remain in the same neighbourhood they would have to pay £100k for the new house or go into shared ownership. These are mostly people of very limited means and many could not get mortgages.

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