Empty Homes: How to re-use your empty home

Government data released in November 2020 showed a massive year on year rise of over 42,000 to a total of 268,385 long-term empty homes in England. This is the biggest rise since current records began.  Ministry of Housing Communities and Local Government data showed that this was the fourth consecutive year in which figures had risen. This was a rise of almost 20% meant that the national total had increased by over a third (34%) since 2016.  Meanwhile in England it was reported that 98,300 homeless families, including over 129,000 children languished in often unsuitable and over-crowded temporary accommodation at a cost of £1.2billion a year. The data in November 2021 showed a positive reduction of 11% in long-term empty homes. Carlisle had seen a significant reduction from 2020 to 2021 with a 35% reduction of properties and the figure in November 2020 (source Council Tax Base data 2021) stood at 656 empty properties. Nevertheless, it is agreed that this total still remains too high and just above the national average. That said, it must also be recognised that reaching a zero target is not possible as properties are continually being added or removed onto the Empty Homes list on a daily basis for a variety of reasons.

Carlisle City Council recognise that communities are entitled to quiet enjoyment and high levels of empty properties are recognised as having a serious impact on the viability of communities in terms of blight on neighbourhoods and potential for anti-social behaviour to occur. Empty homes are also a wasted resource and when brought back into use contribute to an increase in the supply of housing. Dealing with empty properties can therefore have social, economic and regenerative benefits. Carlisle City Council remains committed to tackling empty homes in reducing the impact that these properties may have on communities and also to provide homes for the needy.

In the last 2 years, in addition to the routine activity listed further below we have:

• Provided a Council backed empty homes grant offer (typically £3000). The grant targets homes that have been empty for 2 years or more with the condition that the properties are made habitable and ready for occupation by either a tenant or the owner within 6 months. A land charge is placed on the property and if the property is sold within 5 years then the grant will need to be returned. Thirty properties have benefitted or currently benefitting via this scheme.
• Undertaken Procurement activity to reach an agreement via a company called NBe to provide a bespoke 1-2-1 Empty Homes Service for our owners in the Carlisle district. NBe will provide assistance such as: providing quotes, obtaining contractors and overseeing all aspects of a renovation/refurbishment project. Please contact them on 0333 012 0121. They offer a free, no obligations, initial meeting and can discuss payment and finance schemes to suit all budgets and situations. If you want to know more about NBe Group visit www.NBeGroup.co.uk
• A trial agreement with a Probate Research Company is in process to see if their assistance can provide help and support in identifying contacts and offering Probate assistance.
• A Joint initiative with Brampton and Rural Housing Society (BRHS) and Carlisle City Council has just been finalised which will use identified Council funds to contribute towards BRHS funds. Funding will be used to buy empty homes (in their area) which will be used for low-cost rental opportunities for local residents.
• Increased communication continues with letters to owners of properties less than 2 years empty to advise owners of impending Premium Council Tax and also offer support. This also initiates engagement with owners and can allow us to provide support and also to update our records where necessary.

As part of the City Council’s Empty Homes Strategy, the Environmental Health Team aims to reduce the level of empty properties in Carlisle and help meet local housing need by introducing accommodation back into use. The team:

• Respond to enquiries and complaints from local residents about empty properties.
• Proactively identify empty properties and their owners.
• Provide advice and support to the owners of empty properties with the aim of returning the properties back into use.

The Empty Homes Officer at Carlisle City Council is responsible for providing advice and information on empty and derelict homes across the district, as well as reducing the number of vacant properties. This involves working directly with the owners of empty homes to give advice on returning their property back into use or providing advice in the process of selling (including Auction sales) or renting properties. When this is not possible, as a last resort, we can carry out enforcement action on empty homes to ensure that long term empty properties are renovated; especially if the property is negatively impacting on the community. Property guardians may also provide an option for the right property.

The Empty Homes officer continues to concentrate primarily on the Long-term Empty Homes – those properties empty for over two years. It is considered that two years generally appears to be sufficient time for owners to attend to individual issues regarding re-establishing homes for habitable use. The turnover remains positive below this threshold. Communication with the long-term empty homeowners is via letters, follow-up letters, questionnaires, telephone calls, visits and Enforcement Notices. Physical visits are undertaken with, or independent of the owner, to visually assess the state of the property.As mentioned, those properties identified as a ‘blight’ to the community are given further attention and action to address the disamenity. Council Tax rises to ‘premium rates’ at the two-year point and above to encourage movement.

An empty home costs you money. You still need to pay Council Tax on your empty home, add to that insurance and maintenance costs, repairs to damage caused by vandalism, etc and it can cost more than you think. Empty homes that are empty for two years or more are subject to Premium Council Tax rate. In 2020 these rates increased. These rates have been adjusted so that a property that has been empty for 2 - 5years will be liable to an additional premium of 100% (double usual rate) and for properties empty for 5 years or more will be subject to an additional premium of 200% (treble usual rate). This premium rate remains until the property is reoccupied.

Benefits of bringing an empty home back into use

There are many financial benefits from bringing an empty home back into use and these can include:

• A regular rental income if rented and the removal of your Council Tax liability.
• A capital sum if you sell and the removal of your Council Tax liability, insurance and maintenance costs.

But there are also many other benefits:

• It could provide a home for someone in need.
• Re-using empty homes makes use of a wasted asset.

What can I do with my empty home?

You could occupy, sell or rent your property.

Empty Properties

What you can do?

Selling

These are some of the ways you could sell your empty home:

• You could sell on the open market or use an estate agent; (Get your property valued by a professional property surveyor or estate agent. Set an asking price but decide how flexible you will be as potential buyers may try to negotiate the price).
• You could sell at public auction - this is quick, but you need to price your property realistically.
• If you can't afford the work or it's difficult to organise (for example, because you live a long way away), think about selling to a builder or developer at a lower price (The Empty Homes Officer has list of agents that would be interested in potential properties).

Rental

If your home is ready to move into, you can rent it out. You could do that yourself or use an agency. Renting through an agency can take out some of the hassle and responsibility, although you have to pay for the service. Or you might be able to get a housing association to take it on. You might need to repair your property first, to bring it up to standard. Please note you will need to comply with the latest rental property regulations.

To help choose a suitable agent, you could contact the National Approved Letting Scheme (NALS) who promote quality standards for letting agents.

See www.nalscheme.co.uk or call 01242 581712.

You could also contact the Association of Residential Landlords (ARLA), who self- regulate letting agents and provide information and guidance for landlords and tenants.

See www.arla.co.uk or call 0845 345 5752.

For help finding tenants, contact our Homeless Dept 01228 817079.They try to help people who urgently require a home.

The Homefinder Scheme

We are in the process of developing the Homefinder Scheme. The scheme works by ‘matching’ empty homes for sale with buyers. Carlisle City Council will promote empty homes available across the District (via the website) in the expectation of helping buyers get a ‘foot’ on the property ladder. This scheme will operate if demand is met.

Property Guardian

Property Guardians specialise in offering innovative solutions to empty property owners nationwide. Cost effective services protect and preserve properties by accommodating carefully selected key workers in the empty property using tailored property contracts. The now occupied status of the property results in significant rates and insurance savings. All property related matters from managing the guardians, maintaining the property to regular inspection and compliance reports are covered. Here are just some of the benefits of using our property guardian solution:

Key Benefits

• Secured and Maintained - Property is now protected and preserved 24 hours per day.
• Cost Effective - Average saving of 90% compared to existing empty property costs.
• Hassle Free - Our property management team takes care of everything.
• Flexible Contracts - 28-day cancellation policy

Contact the Empty Homes Officer for a list of providers.

Please note that the government does not endorse or encourage the use of property guardianship schemes as a form of housing tenure. It is important that anyone currently acting as a property guardian or considering entering such an arrangement should fully understand their rights and responsibilities, as property guardianship differs from a residential tenancy.

Benefits to you of selling your empty home include:

• zero council tax to pay, as this is paid by the new owner.
• zero insurance and maintenance costs, as these will be paid by the new owner.
• zero headache of owning an empty home and not knowing what to do with it.

Benefits to people buying your empty home include:

• putting your own ‘stamp’ on the property by carrying out your own repairs and redecoration.
• a chance to buy at a more affordable price (if the property needs repairs).
• vacant possession (nobody has to move out before the buyer can move in).

Potential buyers/contractors

We currently have a list of contractors that are looking for empty properties in the Carlisle District area. If you would like to join the list of interested purchasers please contact the Empty Homes Officer via 01228 817200 or email [email protected]. If you have a property that you would like to sell, please also contact the Empty Homes Officer.

Homes matching Go to homesmatch.co.uk for more information The homes matching service could help pay for repairs before you sell your property. An advantage to the buyer is that they could get a mortgage for a higher-priced property. BUT if they’d bought the property before repairs it could be more difficult for them to get a mortgage afterwards. Homes matching providers can list repairs necessary, price them up and get an independent valuation. They can manage repairs needed at no upfront cost to you and labour can be locally sourced if possible. All work is usually paid for through an increased sales price afterwards. Homes matching providers can also find buyers for your empty home. For example if there is a suitable buyer match and the property needs repairs before selling, the buyer can choose what they would like done before they buy (the buyer will have signed an agreement beforehand so they can't back out during or after repairs). Selling an empty home using a homes matching service If you're having difficulty selling, then a homes matching service can work with your estate agent to help double the advertising efforts (at no extra charge). The matching service could find a suitable buyer too. The estate agent still gets their sales commission, it doesn’t cost them money and helps add value through extra advertising. If your property is not yet for sale but is in good condition, then homes matching services sometimes work in partnership with a firm of solicitors who carry out the sales process for you. There are external companies who can help you decide the best way to bring your empty home back into use such as External Link to homesmatch.co.uk.

Registered Housing Providers

You may wish to contact one of the Registered Housing Providers to discuss the possibility of one of them buying or leasing the property from you. Housing Associations in the Carlisle Area are:

The Riverside Group - Customer Service 0345 111 0000 Email:[email protected]

Castles & Coasts - Call:0800 085 1171Email:[email protected]

Tax incentives to re-occupy your property

The Government has reduced the level of VAT for the renovation of certain empty properties as an incentive to bring them back into use. Residential properties empty for at least two years. Since 01 January 2008, renovations and alterations to residential properties that have been empty for at least two years will be eligible for a reduced VAT rate of 5%. A builder will have to pay the full rate of VAT on materials, but would charge the house owner 5%. It is then up to the builder to re-claim the remaining 15%. It is not the case that the builder will charge 20% then say that it is up to the property owner to claim the 15% back. The builder should be familiar with the legislation and will know if the incentive applies to a project before commencing the work.

Further information on this reduced rate can be found in Section 8 of Public Notice 708 – VAT: Buildings and Construction, available from the National Advice Service on

0845 0109000 or downloadable from HMRC website at www.hmrc.gov.uk/vat

Residential properties empty for ten years or more

A developer or property owner can claim back all the VAT charged on the renovation of a building that has been empty for 10 years of more, once the dwelling is sold. It is important to note that the developer will have to be VAT registered or register for VAT and that the property has to be sold to reclaim the VAT.

If the property owner wishes to retain the property for private residential use and not sell it, they can make a claim for the VAT under the DIY Builders Refund Scheme, available from Customs and Excise.

How the scheme affects the property owner

The main difference between the two incentives is that when the property has been empty for two years, the owner has nothing to do, simply pay a reduced VAT rate. If the property has been empty for ten years, the house owner has to outlay the full VAT rate then claim it back. This may not fit into the property owner’s finances. So it may be the case that the property owner prefers to pay VAT at 5% not 0%. The two-year period still applies even if the ten year period has passed.

How the schemes affect the builder

Under the 5% scheme, the builder will have the additional responsibility of reclaiming the remaining VAT, which they may or may not be happy with. The builder may decide that it is not worth doing the job. That it is why it is important to agree this with the builder at the first point of contact. There is no benefit to the builder with the 5% scheme. The 0% scheme is aimed at the larger builder or developer, as they own the property that is the subject of the work. Therefore, they benefit fully from incentive.

Please note that this information is correct at the time of publication. It is important that you check with HM Revenue and Customs for the up-to-date information. The VAT rate was 20% at the time of publication and the incentives were in place at this time.

Last resorts

As previously mentioned, if an empty home is causing significant blight to an area or causing a statutory nuisance, Carlisle City Council has powers to take enforcement action to rectify this. Carlisle City Council is keen to avoid enforcement action and prefers to work with responsible property owners to rectify issues relating to their properties without resorting to enforcement action. There is a wide range of powers available and we use the most appropriate and proportionate powers to resolve empty property issues. We will often need to use multiple powers to resolve problem cases. Outlined below is the most commonly used legislation which deals with the problems associated with or caused by empty properties.

Prevention of Damage by Pests Act 1949

If a property contains harbourage for pests, the Council can serve a notice on the owner requiring them to remove it.

Section 80 of the Environmental Protection Act 1990

For accumulations of refuse in the garden of a property the Council can serve a notice under this Act requiring the occupant or person responsible to remove it. If the notice is not complied with within a specified timescale the Council will remove the waste and charge the owner.

Section 215 of the Town and Country Planning Act 1990

A notice can be served under this act where the appearance of a property or land is causing significant blight to an area and loss of amenity, such as overgrown and untidy gardens, or untidy ‘run-down’ buildings.

Enforced Sale Procedure – Law of Property Act 1925

If there is a debt owed to the Council, the Council can go to court and have a debt registered as a charge against the property and force the sale of the property to recoup the outstanding debt.

Property Nuisance

When properties are left empty for long periods of time, they can become a focus for vandalism, especially if the gardens are overgrown and the house falls into disrepair.

This can then cause a downward spiral. Owners of an empty house should ensure that it is kept tidy and secure.

You should notify the Environmental Health Team if the disrepair is causing dampness or other structural problems to your house, or if doors or ground floor windows have been broken or are left open. Please call 01228 817200.

Dangerous Structures

Our Building Control team operate a 24-hour service to deal with dangerous structures.

Contact

For more information or discuss options please contact the Empty Homes Officer and he will be delighted to try and assist.

Empty Homes Officer

Carlisle City Council, Civic Centre, Carlisle, Cumbria CA3 8QG

Tel: 01228 817200

Email: [email protected]