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Thousands of homes still empty

Saturday, 1 November 2008 12:01 AM

More than a quarter of a million private homes remain empty in England, despite a decline over the last four years, according to research.

Based on data from the Department for Communities & Local Government (DCLG) and its own database, Halifax has found there were 279,281 empty private homes in England in April 2007, nine per cent lower than the 308,438 recorded in April 2003.

The lender compiled the research ahead of the Empty Homes National Week of Action, which runs from November 24th to 28th 2008.

According to the figures, the north-west has the highest number of empty homes - defined as being vacant for more than six months - at 61,450, accounting for 22 per cent of all the empty homes in England.

Areas with a high proportion of empty homes have house prices are lower than the regional average by around 15 per cent, the research found.

In addition, 15 of the 17 local authorities with the highest proportions of empty private homes are amongst the 20 per cent most deprived areas in England, according to the DCLG's 2007 Indices of Deprivation.

Martin Ellis, chief economist at Halifax, said: "It is highly encouraging that the number of private empty homes in England has declined by nearly a tenth over the past four years.

"Nonetheless, it is concerning that the existence of empty homes remains a significant problem in a number of areas, particularly in the north of England. In some cases, the proportion of empty homes is more than double the national average."

The cost of restoring an empty home attracts the full rate of VAT (17.5 per cent) unless the property has been vacant for more than two years when a reduced rate of five per cent applies.

Halifax estimates that the average cost of restoring an empty home is £30,420 and on this basis, the average VAT payment for restoring an empty home vacant for less than two years would be £5,324.

The lender is calling on the government to extend the reduced five per cent rate of VAT for restoring an empty home to all properties vacant for more than six months, to provide a more level playing field between individuals and local authorities. Typically, local authorities do not pay VAT on renovation activities.

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