Thursday, October 18, 2007

Good news but is the government still missing the point on empty homes?

Government announcements on empty homes are like buses you wait ages for one then four turn up at once. So it was with last week’s comprehensive spending review. The chancellor announced four changes, three of which will undoubtedly help return more of England’s 670,000 empty dwellings into homes and one that highlights why the government is still missing the point.

Firstly the good news: anachronistic VAT rules that deem building a new house is zero rated but refurbishing empty homes is charged 17.5% have been amended. Now works to renovate homes empty for two years or more will be charged at 5% VAT (Down from three years). A small tweak perhaps, but it will make it more cost effective to bring about 100,000 empty homes back into use. In a property market governed by profit margins this is bound to have a positive effect.
Secondly the government is to review council tax discounts for empty homes. Currently homes are exempt from council tax for up to twelve months after they become empty. Many then enjoy a 50% discount for as long as they remain unoccupied. Councils can remove the discount but only about half have done so. We calculate that half a million empty homes receive a discount or are exempt from council tax. A public subsidy for keeping homes empty,

Thirdly the government is to include reused empty homes within the new housing and planning delivery grant. Reusing empty homes creates new housing just as well as building new homes but with reduced environmental impact and less land take. In our view rewarding council’s for bringing empty homes back into use will help increase housing supply.

So why is the government still missing the point? For that we need to look at the fourth and less welcome announcement. The government has removed the requirement for local authorities to report the number of empty homes they have returned to use. Their claim that the move reduces the bureaucracy and burdens on local authorities would be more plausible had they not introduced a whole raft of new indicators on building new homes at the same time. It rather begs the question how will the government reward councils for bringing empty homes back into use if it no longer wants to know what they are doing about it? On a wider level it also illustrates their thinking. They have listened and responded to ideas that will help, but on a political level they still don’t appear to accept that getting more homes back into use will increase the numbers of available homes. It’s a shame. The government is introducing measures that really could help but appears blind to their potential.


  1. This is a very thought-provoking discussion piece. Can you provide any link to the government's announcement on removal of requirement to report stats for LAs?

  2. The DCLG paper with the proposed 198 new indicators can be found here.

    No mention of empty homes

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  4. Sherlock Nottingham8 November 2007 at 15:10

    It must be the time of night, but your post is unintelligable. Could you please re post it in English for us grumpy old computerphobes?

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  6. I like the photos down the side of this blog.
    Some heavily damaged properties and Salford slums that have been boarded up for a good reason.
    Just because people want houses, doesn't mean we should push them back into the slum housing.

    Granted your post on the taxing of brownfield redevelopment/renovation is a good one, and it's about time that the government just wipes the tax all together and bans green belt development where alternative brownfield is available (and I don't mean backyards... bloody councils.)

  7. Hi,
    Could you tell me where you found this number of 1 Million empty properties please? I know it's been quoted by Anne Power at LSE, but cannot get a hold of any official stat to support this.
    Thanks for your help.