Slowing market dents empty homes campaign

Thursday, 20, Mar 2008 09:04

The moderation in UK house prices seen over the last six months is threatening to have a negative impact on the campaign to bring empty homes across the country back into use.

While prime minister Gordon Brown's government has promised to build two million new homes by 2016, with a further million carbon-neutral homes by 2020, the Empty Homes Agency (EHA) argues a proportion of new supply could come from the re-occupation of existing property.

However, the slowdown in house prices could prove detrimental to this plan.

"The housing market is changing rather radically at the moment and one of the things that we are completely unclear about, and trying to prepare ourselves for, is what it's going to be like campaigning on empty homes in a depressed or falling housing market," said Henry Oliver, policy advisor at the EHA.

"Because amazingly since we were set up in 1992 the housing market has always been rising. We've just got so used to it that we've been able to assume that there will always be demand, and in some places there is clearly going to be a change."

Research from the Department for Communities and Local Government (CLG), Royal Institution of Chartered Surveyors and the Financial Times all illustrate annual house price growth has been slowing.

However, the situation could prove beneficial in some quarters of the market.

"It could be a problem because it could mean the most marginal properties, which are least viable for borrowing and so on, are going to go down the tubes," continued Mr Oliver.

"But it also means, for example, that there's going to be a lot of commercial property coming up for potential re-use.and we would be looking for innovative ways of tacking that, for instance what's called Short Life Housing (SLH)."

SLH, a policy widely employed in the Netherlands, involves residential property scheduled for renovation, demolition or redevelopment are used as accommodation in the interim.

"There are companies that are good at fitting out properties to be very good temporary housing," explained Mr Oliver.

"Then they recruit what they call guardians, which are the tenants, to live in the property and they have a trade off between cheap housing and security of tenure.

"Obviously there is not a guaranteed tenancy but it tends to appeal to entrepreneurial types who are moving into an area and haven't quite decided where they want to live."

According to Halifax bank there are some 288,763 private houses sitting empty in England alone at present, with significant numbers also in Scotland, Wales and Northern Ireland.