This is a blog post from the Leeds Empties site - but hopefully of interest to EHN members.
Most of us will have an idea of what we expect an “empty home” to look like. It’ll probably be boarded up. It might have rubbish in the front garden. There may be grass growing in the guttering. In short, it’ll look a right mess, and will be having a negative impact on the neighbourhood.
So what if we suggested that out of around 5000 long-term empty homes in Leeds (the actual figure varies depending on exactly how you count – but we’ll stick with this round figure for now), perhaps only 500 are like this? We’ve been working on empty homes for three years now – and like most people, when we started we had strong preconceptions of what “empty homes” were. The empty homes we’d spotted were the boarded up ones – and then we were told there were 5000 empty homes. So we assumed there were lots more, just like those, spread across the city.
As is often the case, we’ve since found out that it’s a bit more complex than that. That’s not to say that it’s any less of an issue – it’s just perhaps a slightly different issue to the one we might think it is.
So we’d like to share with you some reflections on what we’ve come across over the last couple of years – different situations, different “types” of empty home – which together paint a different picture to the one you might be accustomed to. In future posts, we’ll explore the implications of this for future strategies to bring more empty homes back into use – both in Leeds and across the UK. We’ll also outline the kind of situations where we think we can be of most use.
What is a long-term empty home?
A home is defined as a “long-term empty home” when it’s been unoccupied for six months. Empty homes statistics are gathered from Council Tax records – so are reliant on people giving accurate information about their property to Council Tax. The data, it would seem to us, was more reliable in the past as there used to be a financial incentive to contact the council when your home became empty – as a discount on Council Tax used to be offered. This discount no longer exists – so it’s likely that there are empty homes in Leeds which aren’t currently recorded as empty. Similarly, it’s possible that there are occupied homes that are currently recorded as empty homes (as the occupant/owner hasn’t informed Council Tax of the change in circumstances, as they were already paying full Council Tax).
So, as you can see, the stats can be a bit complicated. Most of the time, at Leeds Empties, we don’t worry too much about the detailed stats – other than to acknowledge that there are lots of empty homes – and we want to bring back into use as many as we can.
For now, let’s take the 5000 figure, as it won’t be far wrong, and it’s a nice round number. Let’s start to look at the “types” of empty home that make up that 5000.
Please note that all of this is based on our experiences – rather than detailed analysis of data. So in some cases, we may be wrong – and our guesses on numbers might in some cases be wide of the mark – but after 3 years working on empty homes we’re pretty confident about what we’re saying here.
Homes Sold (Subject To Contract), For Sale, To Let or under renovation
It’s worth recognising that a good number of “empty homes” are in the process of being rented out or sold, or are under refurbishment. When we’ve focused on particular areas, such as LS28, we’ve found that around 25% of long-term empty homes fall into this category. Sometimes we can help (for example we’ve helped people to consider alternative estate agents or letting agents) but more often than not, the thing that will sort out most of the homes in this category is time.
So, we’d suggest around 1250 of the 5000 “empty homes” are currently unoccupied for a pretty good reason – and in most cases, they’ll be occupied again sooner rather than later.
Problematic empty homes
Of the 5000 empty homes, we’d guess there may be 500 that look like how you might expect an empty home to look. The windows may be boarded up. The garden may be overgrown. Typically they’ve been empty for at least two years. The adjacent house may be suffering from damp, or vermin. In one-way or another, the home is causing problems.
These homes are the ones primarily dealt with by the council’s Empty Homes Team. They’ll engage with the owner to encourage them to bring the house back into use, and they’ll threaten – and take – enforcement action where appropriate. This can include doing work in default (e.g. tidying up an overgrown garden and charging it to the owner) through to compulsory purchase.
We deal with some homes like this, and have had some successes – but such problematic empties tend to be the focus of the council’s team.
At a guess, we’d say that homes like this account for around 10% – or 500 of the 5000 empty homes in Leeds.
Empty homes that are difficult to rent out
There are some empty homes where it’s hard to work out a way forward. For example the data on Leeds Data Mill suggests there are around 20 pubs in Leeds with vacant accommodation above the pub. It’s likely to be difficult to rent that accommodation out to a third party. Similarly, lots of shops, particularly on suburban shopping parades, have flats above them, which can sometimes be difficult to rent out separately.
There are also homes that are perhaps undesirable – such as basement flats in terraced houses that have been converted into six bedsits – something you see a lot of in inner-city areas such as Cross Green, where we are based. Again, Leeds Data Mill suggests there are a number of terraced houses that have been split into flats/bedsits, where some of the flats have been empty for some time. (And remember, a “home” in this context can be a bedsit or a flat, as well as a house.)
At a guess, we’d say there are 200 homes that would fall into this category.
This is a term we came up with for empty homes that were typically bought as buy-to-let investments, in inner-city Leeds, between around 2003 and 2007. After the financial crisis hit in 2007, the value of many of these houses fell. A number subsequently became empty, and whilst the owners typically can afford to pay the mortgage, they often can’t afford to invest in the property to bring it back into use.
They also are unable or unwilling to sell, as the sale value would not cover their outstanding mortgage. So the homes stand empty – with nothing likely to happen until the owner either stops paying their mortgage (so the home is eventually repossessed) or the house value rises back to where it was and the owner can either sell or borrow to undertake renovations.
In some cases, we have worked with owners to help them to explore lease-and-repair schemes – where a third party (in the cases we worked on, a social enterprise) offers to lease the property, do repairs and bring it back into use - with their investment being repaid through rental income. We have been successful in arranging one such scheme, but in the majority of cases, either the owner or their lender has refused to pursue this option further.
At a guess, we would suggest there are 150 zombie empties, primarily in inner-city postcodes.
Empty homes owned by companies in administration
There is data available on Leeds Data Mill about empty homes owned by Limited Companies. We’ve done some analysis of this data which suggests that at least 25 empty homes in Leeds are owned by companies in administration. We suspect at least another 50 are owned by companies which are not currently trading.
From previous experience, we’d expect many of these homes to be sold at auction by the administrators. However, it’s possible that this could take some time. A number of the homes owned by companies in administration have already been empty for more than two years.
So we’d suggest homes owned by companies in administration/not currently trading account for approximately 75 of Leeds 5000 long term empty homes.
Unsold houses and flats in new developments
Looking through the data on Leeds Data Mill, we identified a number of flats and houses which appear to still be owned by the original developer. It’s hard to tell for sure, but we think there are at least 50 such properties. Without looking into the detail, we can’t tell exactly what is happening with these properties, but we’d assume that they are slowly being released to the market, and as such, will eventually be lived in. We’re told that there were far more homes that would fit into this category three or four years ago – when there were more unsold city-centre flats.
Other empty homes owned by companies
Leeds Data Mill data suggests there are 400 long-term empty homes owned by limited companies in Leeds. We’ve accounted for some of these above – such as those owned by companies in administration, by pub companies, or by the original developers, but it leaves at around 250 more which are owned by companies, for a host of different reasons. Without contacting the companies directly, it’s difficult to speculate on the reasons why they have properties which are long-term empty.
This has traditionally been seen as an issue primarily in London and the South East – with investors buying properties, leaving them empty, and then selling them for a significant profit at a later date.
Whilst it isn’t such a big problem in Leeds, we suspect that a number of homes are left empty in Leeds by owners who have no medium-term plans to either live in the property themselves, or rent it out.
We have come across long-term empty properties, particularly in more affluent suburbs of Leeds, which we suspect are owned by “buy-to-leave” investors.
In some cases, the homes are ready to live in, or require only minimal refurbishment work. In such cases we suspect the owner has made a considered decision to do nothing, and wait for the value of the house to rise. In other cases, we suspect that people have bought a home for cash, as an alternative investment to low-yielding savings – but do not have further cash to invest in the property.
Of course, people are free to leave a home empty as long as they pay council tax and the house doesn’t cause problems for neighbours – but the wider societal impact of treating housing as an investment in this way is that a decent home is not available for other people to rent or buy.
It’s hard to estimate how many homes fall into this category, but we’d suspect there may be around 150 such properties in Leeds, mostly in the more affluent suburbs.
So, we estimate that the “types” of empty home that we outline above account for around half of the long-term empty homes that we have in Leeds. They’re unoccupied, at a time when there is severe pressure on current housing stock, and plans to build 70,000 more homes by 2028. But they’re probably not what you might think of as “empty homes”.
This has implications for our work – and the work others do across the country – to bring empty homes back into use. An approach that will work for the owner of a boarded up home will be very different to one that will engage someone who’s happy to do nothing and see the value of the house they own rise over time. We don’t have answers to this yet – but it’s the kind of thing we’re thinking about carefully as we explore how to expand what we do, so we can help to bring back into use more long-term empty homes.