With more than 700,000 homes currently empty in the UK (based on statistics for 2012), and more than 259,000 of these properties classified as long term empty (i.e. for more than six months), steps are currently being taken to try and remedy what has been highlighted as a considerable disconnect between the numbers of homes available in the UK and the numbers of people who need them. In order to try and reduce these statistics the government has launched a new scheme – the New Homes Bonus – which is designed to encourage those who own homes that have been long term empty to be put back into use.
Lack of housing is currently a serious problem in the UK– in particular affordable housing – as the rate of development has failed to keep pace with an ageing and expanding population. Although problems for first time buyers and those looking to move up the property ladder have been well documented, the rental market is also short on properties and with so many homes simply standing empty some sort of action has been required for some time. However, in many situations, the reason that a potentially rentable home is empty is one that could not be remedied by a landlord, either because of regulation standing in the way or lack of funds.
In recognising the current lack of affordable housing, the New Homes Bonus scheme is essentially a grant that is paid by government to councils to be used for providing affordable homes. It is to be used for, among other things, removing unnecessarily complex regulatory issues and providing finance for projects that can’t proceed without it. The financing is received by the local authority and can be passed on to landlords via various types of funding, such as empty property loans and grants to improve multiple occupancy premises. Empty property loans, for example, can be provided to landlords in order to make improvements to a property so that it is of a standard to be rented out, to extend a property, to improve energy efficiency in a home and to ensure that any hazards are dealt with so that a property becomes habitable, as well as helping to fund Green Deal initiatives. Grants that might be available for houses in multiple occupation are generally designed to pay for necessary works that will ensure that the home meets the standards expected of this type of property, principally with the expectation that the property can then be rented out once again.
In addition to the New Homes Bonus, which could provide financing for landlords in certain situations who have empty properties and want to get them back on the market, there are also proposals for a punitive council tax payment. This would essentially be a premium charged on top of existing council tax for those properties that come under the definition of an empty home – so there is plenty of motivation for making sure that empty properties don’t remain uninhabited for much longer. If you currently have an empty property and you would like some advice on how to benefit from the New Homes Bonus then feel free to contact one of our team.