The Role Auctions Can Play in Reclaiming Empty Homes

As the UK is in the midst of a housing shortage and new housing targets continue to not be met, there is pressure for more new homes to be built. However, reclaiming homes sitting empty is just as important as building new ones.

With the UK’s chronic need for housing, more homes need to be brought into use – and fast. But this is where property auctions can come in as these can play an important role in reclaiming empty homes.

So, let’s talk about the numbers behind empty homes, why more vacant properties may be sold at auction moving forward and how property auctions can help bring them into use more quickly.

The numbers behind empty homes in England

The latest government data on council tax base statistics shows there are approximately 250,000 properties in England that have stood empty for more than six months, according to research by Action on Empty Homes (formerly The Empty Homes Agency).

Additionally, another 207,000 empty homes are covered by exemptions and do not pay council tax, so these don’t show up in the previous figure. And it also excludes a further 257,000 so-called ‘furnished empties’ or ‘second homes’ and more than 70,000 second homes that are flipped to paying business rates as permanent short-term lets.

This equates to more than one million homes in England with no residents. On top of that, there’s a rising number of vacant properties in legal and inheritance limbo due to a deceased owner. Bringing more of these homes into use would help alleviate the housing shortage and improve local neighbourhoods.

Rebecca Moore, Director of Action on Empty Homes, tells us: “With 250,000 long-term empty homes and 250,000 homeless people in England, it is vital that more long-term empties are brought into use more quickly.

“Since the pandemic we have also seen rises in the number of vacant homes covered by what are known as council tax exemption categories. This can include what are sometimes called ‘naturally occurring’ empty homes. For example, homes of people who have died.

“These used to consistently number around 90,000 in England, but after the pandemic they flipped up to 110,000. In the latest data, they have risen again to 122,000. This is another big tranche of housing sitting empty, alongside our quarter of a million ‘official’ long-term empties.

“These homes should be quickly returning to use – but the data suggests more are remaining empty for longer. Auctions can be a useful route to get homes trapped in an ’inheritance limbo’ moving, so that the proceeds of sale can be distributed to beneficiaries and the homes can more quickly return to residential use.”

More vacant properties may be sold at auction moving forward

Empty homes have frequently been sold at property auctions. Selling these kinds of properties at auction comes with a range of benefits, including faster transactions. It can also be a more efficient, secure and convenient way to sell.

With legislation being brought forward by the government that could increase the number of empty homes being brought into use, this could lead to more owners of vacant properties deciding to sell via auction.

The Levelling Up and Regeneration Bill, which is currently making its way through parliament, is set to bring new powers for councils to introduce an empty homes council tax premium after one year – rather than two. Additionally, the bill offers similar powers to double council tax on second homes or furnished empties that are not being let.

This may cause an increase in properties being sold at auction as there will likely be a rise in owners looking to sell empty properties, second homes or short-term rentals quickly before it’s been empty for a year or prior to these changes coming into effect altogether.

While many are calling for a national Empty Homes Programme in England like there is in Scotland and Wales, some local authorities are already committing to community-led projects which refurbish empty homes to help meet local housing needs.

Additionally, 120 local authorities take part in National Empty Homes Week, which was held the week of 27 February this year. This shows that there are numerous councils that support more being done about empty homes in their local areas and are even finding ways to facilitate this.

Property auctions can help bring empty homes into use more quickly

Property auctions can play a very important role in not only bringing more empty homes into use but allowing this to happen much more quickly than on the open market.

Chris Bailey, National Campaign Manager at Action on Empty Homes, says: “With empty homes at their highest level in a decade, amidst an intense national housing crisis, we want to see local authorities and the owners of empties, using all the resources available to them to get more of these wasted homes back into residential use.

“Auctions can play a vital role in this. Transactions are fast and guaranteed, reducing the delays that often plague conventional sales, particularly where properties may be perceived as challenging or in need of investment.”

He adds: “Local authorities such as Birmingham have shown how auction sales can have safeguards built in, to ensure that planned works to return homes to use are carried out promptly within agreed timeframes. It is this sort of innovative thinking and attention to detail that can really make a difference.”

The Role Auctions Can Play in Reclaiming Empty Homes