BLOGS

The scale of the empty homes challenge

The UK faces a housing supply crisis that new construction alone cannot solve. With an estimated 700,000 long-term empty homes across England, Scotland, Wales, and Northern Ireland, policymakers are increasingly turning their attention to unlocking existing stock. Propertymark's roadmap to tackle this issue arrives at a pivotal moment, proposing a pragmatic blend of carrots and sticks that could deliver meaningful supply gains without breaking ground on a single new site.

Empty homes represent a unique opportunity. Unlike new-build pipelines that take years to materialise, vacant properties can often be brought back to market within months given the right incentives. The challenge lies in understanding why these homes sit empty—whether due to probate delays, renovation costs, absentee ownership, or simply landlord hesitation—and designing policies that address each barrier.

Incentives that work: grants, loans, and tax relief

Propertymark's roadmap emphasises the role of financial incentives in motivating owners to renovate and let or sell empty properties. Local authority empty homes grants, typically ranging from £10,000 to £25,000, have proven effective in areas such as Greater Manchester and the West Midlands, where councils have tied funding to conditions requiring properties to be let at affordable rents for a minimum period.

REalyse data shows significant refurbishment and conversion activity already flowing through the planning system. Over 10,000 refurbishment-focused planning applications have been granted across the UK, with a further 12,500 currently in progress or under review. This pipeline demonstrates appetite among property owners to bring stock back into use—but also highlights friction points. Notably, refusal rates for refurbishment schemes remain elevated, suggesting that planning complexity and local objections continue to impede progress.

The roadmap's call for streamlined permitted development rights for residential conversions aligns with this evidence. Central London alone has seen 367 conversion schemes approved in the past three years, creating an estimated 1,798 new residential units from former office and commercial space. Greater Manchester follows with 190 approved conversion projects delivering over 1,500 units. These numbers demonstrate that when regulatory barriers are lowered, the market responds.

Local authority action: council tax premiums and compulsory purchase

The stick alongside the carrot comes in the form of council tax premiums on long-term empty properties. Since April 2024, local authorities in England have been empowered to charge premiums of up to 100% after one year of vacancy, rising to 300% after ten years. Scotland and Wales have implemented similar measures, with some Welsh councils already charging double council tax on second homes and empty properties.

Early evidence suggests these premiums are having an effect. Councils report increased enquiries from owners seeking to sell or let properties before premium charges apply. However, Propertymark's roadmap correctly identifies that premiums alone are insufficient. Owners facing renovation costs that exceed property values—particularly in lower-value markets across the North and Midlands—may simply accept the premium as a sunk cost.

This is where compulsory purchase powers become relevant. The roadmap advocates for local authorities to use empty dwelling management orders (EDMOs) and compulsory purchase more proactively, particularly for properties that have been empty for extended periods and are causing neighbourhood blight. REalyse planning data indicates that regions like Nottinghamshire, Lancashire, and South Yorkshire—where conversion scheme counts are strong—could benefit from coordinated local authority intervention to match willing investors with reluctant sellers.

Regional variations in conversion activity

The geography of conversion activity reveals where policy is working and where gaps remain. Central London's dominance in office-to-residential conversions reflects both high land values that justify renovation costs and strong permitted development provisions introduced over the past decade. The West Midlands shows particularly strong activity, with over 2,300 proposed residential units from conversion schemes—many linked to Birmingham's urban regeneration initiatives.

However, the data also highlights uneven progress. Regions with older housing stock that requires significant investment—including parts of Wales, Northern Ireland, and northern England—show lower conversion volumes relative to their empty homes counts. This suggests that national policy frameworks need regional calibration, with higher grant levels and stronger local authority support in areas where the economics of renovation are more challenging.

The path forward

Propertymark's roadmap offers a credible framework for unlocking empty homes, but success will depend on implementation. Three priorities stand out:

Simplify planning for change of use: The current system creates unnecessary friction. Extending permitted development rights for residential conversions, while maintaining appropriate safeguards for heritage and amenity, could accelerate the pipeline significantly.

Target incentives geographically: A one-size-fits-all approach to empty homes grants will not work. Higher-value markets in London and the South East may need only light-touch intervention, while lower-value areas require more substantial support to close the viability gap.

Strengthen local authority capacity: Councils need resources and expertise to identify empty properties, engage with owners, and use enforcement powers where necessary. The roadmap's call for dedicated empty homes officers in every local authority deserves serious consideration.

With over 10,000 refurbishment applications already progressing through planning and thousands of conversion schemes delivering new homes, the foundations for tackling empty homes are in place. What's needed now is the policy commitment to build on them.