Charles Haresnape: 'The issue of housing supply is one that grows more and more'

A recent report from the Empty Homes charity supported by Aldermore shows that there are over 200,000 homes, or 0.88% of the country’s housing stock, classified as long-term unoccupied by the government, having been empty for six months or more.

While empty homes are not a new problem, what many might not realise is that in June the majority Conservative government opted not to renew the coalition government's Empty Homes Community Grants Programme, which provided community-led housing organisations with £50 million in funding a year between April 2012 and March 2015, bringing almost 9,000 homes back into use in the process.

The issue of housing supply is one that grows more and more pressing with every year that passes as the UK fails to meet the annual recommended target of 200,000 new homes a year. The lack of supply is the biggest challenge facing the housing market today.

Part of this simply stems from a long-running failure to build enough houses, both public and private. More than 200,000 were built each year throughout the 1950s, 1960s and 1970s. Since then we have hit 200,000 only once, and in 2014, a year when almost eight-in-ten (78%) British voters thought the government should place a higher priority on tackling empty homes - with a further 36% saying that empty homes were a blight on their local area - UK housebuilders only managed to construct a mere 125,000 properties.

Bringing empty homes back into use can provide a welcome boost to the nation’s housing supply, and is far more cost-effective as converting empty properties is cheaper than building new ones - with the typical cost of bringing a home into reuse coming in at £25,000.

The number of empty homes also exacerbates the apparent North-South divide, with the North of England having higher levels of empty homes (1.34% of the North East’s housing stock is classified as long-term empty) combined with lower levels of construction. Figures from the Office for National Statistics showed that the UK’s construction industry contracted sharply in July 2015, with output falling by 1% from the previous month.

While empty homes are an essential part of the solution to housing supply constraints, it is important to recognise that the number of genuinely long term empty homes only represents a relatively small proportion of the nation’s housing stock.

Even if they were all brought back into use, they could only meet a small fraction of Britain’s housing needs. To meet current demand we need to take a two-pronged approach, both by refurbishing empty homes and bringing them back into use, combined with building new homes.

By Charles Haresnape, Group Managing Director – Mortgages at Aldermore