Can I have an Empty Home? Yes You Can!

One of the commonest questions we are asked at the Empty Homes Agency goes something like this “I need a home, but I can’t afford one, can I have an empty one?”

For reasons that are pretty obvious it’s a question we are getting asked more and more often. Our answer I’m pleased to report is the Obama like “Yes you can” In fact even better than that we can sometimes even offer a choice. Our answer goes something like this:

“First of all you can borrow one. The best way to do this is through a shortlife housing cooperative. The cooperative usually takes out a lease on an empty property, puts it into shape and rents it out to its members at low rents. There are lots of cooperatives in London and the south of England such as Westminster Housing Cooperative that operates across London. But shortlife is more sparsely distributed around the midlands and the North of England.

Secondly you can rent an unused property. A similar approach to shortlife has lead to the amazing growth of property guardian schemes. An idea imported for the Netherlands, companies such as Ad Hoc and Camelot have developed it into a flourishing business. Available for employed single people and couples in town and country across the UK and Ireland

Thirdly for a more involved approach there are a number of brilliant self-help housing charities that train homeless people up with building skills and enable them to do up empty properties and create their own homes. The properties are generally surplus social housing. Charities such as Latch and Community Campus 87 lead a growing sector largely based in cities in the North of England.”

Many people are happy with our answer, but many I suspect would like something else. Apparently, even now 90% of us want to be owner-occupiers, and there’s no reason to think that people in housing need don’t have similar aspirations to the rest of the population.

And why not? You should also be able to buy a property cheaply and do it up yourself. In previous recessions “homesteading” has been available to people who would otherwise would be unable to afford homeownership. Councils and Housing Associations disposed of their properties at heavily discounted prices. Newcastle City Council even sold flats for 50p each in the 1990s.

Homesteading schemes helped people with renovating the property sometimes with the help of a grant, sometimes with training. Conditions were normally applied to ensure that only people who intend to become part of the community bought the properties. Speculators were heavily discouraged. This meant that areas with high levels of vacancy and high turnover of residents were stabilised with new long-term occupants who had a strong investment in the community.
Just the ticket for regenerating communities and giving people what they want. It has worked brilliantly in previous recessions, there is no reason why it won’t work in this one. Indeed it could work on privately owned properties acquired especially for the purpose. If you are a council or a property owner who is interested please let me know and let’s make that answer to “can I have an empty home?” even better.

Some good news on reposessions

In yesterday’s post I mentioned some of the victims of the housing market downturn; tenants in buy-to-let properties. Many have found themselves homeless because their landlord has not kept up with mortgage repayments and had their property repossessed. If the cause were the tenant not paying their rent well fair enough perhaps, but all too often it’s no fault of the tenant at all. Most mortgage agreements contain clauses that require the landlord to seek the lenders permission to grant a tenancy. Many landlords don’t realise it’s there and others just ignore it. After all what lender is going to kick up a fuss? Very few probably so long as mortgage payments are kept up.

But here’s the rub. If the landlord doesn’t keep up with payments and gets repossessed, (and there are plenty of buy-to-let investors who geared themselves up too high and find themselves in difficulty), the tenancy is deemed null and void and the tenants kicked out by the lender.
Good news on this today. The government has announced that it is consulting on new rights for tenants to avoid the worst of this. Within their press release a dreadful story showing why action on this needed “A lone parent with two children who had been renting a property for 10 months. She came back from a holiday to find the locks had been changed and there was a notice announcing that a possession order had been made.”

Unaffordability - the saviour of our housing market

Last week I reported on the truly staggering empty homes problem in the United States. The popular repost is - it could never happen here. Well possibly, but probably not for the reasons you might think

When the property market started falling last year there was much talk of what the graph would look like. Would it be a quick down and up “V”, a slower “U”, a down up down and up “W”, a down and stay down “L”, or my particular favourite analogy a down, stay down, then up “skip shape”.

A year in, with talk of property prices and stock markets rising, and banks back in the black, it is now apparent that the “U”, “L” and “skip” property markets are not on the cards. We may have a quick “V” downturn after all. To many people three months of house price rises have come as something of a surprise. The flood of repossessions was less extensive than feared, and with fewer properties on the market, those that are available have scarcity value. Phew, that wasn’t so bad was it, lets crack open the bubbly.

Well hold on there is still the possibility that this may be the middle up slope of the “W”. Or indeed a shape we haven’t even thought of yet. As I reported here last week the property market in the United States, which started falling six months before ours, has taken a real battering. And although there is no guarantee that ours won’t follow; one little discussed factor may have saved our housing market from meltdown. Ironically it is one that is usually spoken of as its greatest weakness – unaffordability. This problem has resulted in younger people being priced out of owner occupation. Indeed in 2007 the average age of a first time buyer had reached 34, up seven years since 1977. Now as it so happens, it is that same age group that have been hit hardest by the recession. Increases in unemployment have been greatest amongst the young . The older (mortgage holding) work force has been comparatively spared – so far at least. This means that a relatively small number of redundancies have resulted in property repossessions in the UK. The United States on the other hand, with its lower house prices and sub-prime loans, has high owner occupation rates amongst those hit hardest by redundancy. They have been overwhelmed by foreclosures. Some analysts believe there could be 10 million there by 2012.

There are of course many people here whose lives have been devastated by the recession. Not least tenants in buy-to-let properties that find themselves evicted becasue the landlord couldn't keep up with mortgage payments. A further rise in unemployment could well start affecting larger numbers of owner-occupiers as well. In the meantime at least perhaps we should be grateful that millions of us won’t be losing our homes because we couldn’t afford them in the first place.