Buying An Empty Property
Can I buy or rent an empty home?
Buying or renting an empty home to provide accommodation for you, your family or friends seems like the ideal solution both to your housing problems and to the nuisance and waste of a home standing empty. In reality it can be a lengthy and difficult process, with no guarantee of obtaining the empty property you have set your sights on. There are many complicated reasons why a home might stand empty: the owner dies and the legal ownership of the property is unclear; a local authority runs out of funding for essential repairs; a private owner cannot sell because decay of the neighbourhood means there is low demand for housing; a private landlord waits for a rise in house prices to make the most of his investment. Every empty home has its own story, and there is no simple ‘formula’ for bringing empty properties back into use. This factsheet is intended as a general ‘checklist’ to get you started.
I want to buy an empty home
The first step is to find out who owns the property and where they can be contacted. The owner could be a local authority, housing association, government department, private company or private individual. For details on how to trace owners, see Factsheet 1-A – ‘How can I trace the owner of an empty home? (attached).
You will then need to contact the owner and ask whether he/she is interested in selling the property to you. Bear in mind that owners may be reluctant to sell their empty homes because, for all the reasons mentioned above (and many more), they have already chosen to keep them empty in the long term
If the owner is interested in selling the property, you will need to agree a purchase price. You should bear in mind that just because a property is empty and needs renovation, it won’t necessarily be cheap to buy. Owners will usually ask the market price less the cost of any refurbishment. If homes in your area normally sell for £100,000 and the renovation work costs £20,000, you would be looking at a purchase price of £80,000.
Once the price is agreed, you will need to follow all the usual steps for buying a home: put down a deposit (usually 5% of the purchase price); arrange a mortgage and loan to cover renovation costs; have the building surveyed by a surveyor; and get local authority and Land Registry searches and all the other legal formalities carried out by a solicitor or conveyancer.
Getting the finance to buy a dilapidated home can be difficult as lenders often view these properties as a risky investment. Some building societies now offer ‘brown’ or ‘eco’ mortgages which cater specifically for people wishing to refurbish empty and dilapidated homes, for example the Ecology Building Society (www.ecology.co.uk) and the Norwich & Peterborough Building Society (www.npbs.co.uk). For information and advice on finding a lender, contact the Council of Mortgage Lenders, 3 Saville Row, London, W1X 4AF, Tel. 020 7437 0075, Fax. 020 7440 2262.
You could look into buying a property at an auction. Empty properties are sometimes on offer (for example homes which have been repossessed), and local councils generally sell their unwanted properties in this way. An ‘open day’ might be held when prospective buyers can view a property, although the kind of information available on homes sold at auction will vary. It is up to the buyer to find out details before the auction day. A ‘guide price’ or ‘reserve price’ (the minimum price expected) might be given. Buyers need to have all financial arrangements, such as a mortgage, in place before the auction. Prospective buyers then make bids for the property on the auction day, and the successful (highest) bidder must go through with the purchase within a specified number of days. Contact the Royal Institution of Chartered Surveyors (RICS), Customer Services Department, 12 Great George Street, Parliament Square, London, SW1P 3AD (Tel. 020 7222 7000) for details of estate agents running auctions in your area. For a free guide to buying property at auctions, contact Strettons, Central House, 189–203 Hoe Street, London, E17 3SZ, (Tel. 020 8520 8383, www.strettons.co.uk).
You could also check whether there are any ‘homesteading’ schemes running in your area. In homesteading schemes local councils and housing associations sell their empty homes to members of the public at a minimum price (it can be as low as £1), and buyers must agree to pay for any repairs and maintenance and to make a commitment to the local area. Unfortunately, ‘homesteading’ schemes are rare and tend to be run only in areas which have very low demand for housing. Contact your local authority empty property officer for details.
I want to rent an empty home
It is frustrating to see council and housing association properties standing empty while you or someone you know has been waiting to rent a home for several years. Once again, there are many complicated reasons why these homes are left empty, and it is not the purpose of this factsheet to go into the maze of rules and regulations governing the allocation of homes by local authorities and housing associations. What we would say is that it is not simply a case of asking the local council/housing association if you can rent a home you have seen standing empty. Empty council/housing association properties must first be put into a habitable and safe condition – they will then go into the stock of housing available to people on the waiting list. Councils and housing associations will only house people on their waiting list according to their housing need as assessed by the council/housing association.
If you are on a low income, it might be worth checking whether any housing co-ops are running in your area. Housing co-ops are run by members for members who are in a low income bracket (up to approximately £150 per week). Housing co-ops tend to deal with ‘short-life’ properties – they often work with councils and housing associations whose properties are empty for short periods (usually six months to two years). These properties are refurbished and then let out to people in housing need, but because they are ‘short-life’ you could be asked to move after six months. Contact your local authority empty property officer for details of co-ops running in your area.
If you are in housing need, homeless or about to be made homeless, you should contact the housing advice centre in your local authority area. They may not be able to provide accommodation immediately, but they can give advice on how your local council can help. Even if you are not in priority need, you should be eligible to register for future help.
How to find an empty property?
A few months ago I was asked to write an article for the BBC’s website on tracking down empty homes. In one paragraph I mentioned that most local authorities had a list of empty properties that you could ask to see. I went on to say that under the Freedom of Information Act you have the right to request the list; all completely true. What I hadn’t anticipated was the effect this was going to have. Hundreds of people who read the article went straight out and made written requests to their local authority. Most I have to say were given the cold shoulder. No doubt many have very good grounds of appeal, but I suspect that most people will have found this a rather dispiriting experience and are still left looking for an empty home to rescue. On the positive side the sheer number of requests is causing local authorities to reconsider their policies on releasing information and many are beginning to take a more positive view. But whatever the rights and wrongs, most people who requested information didn’t get what they want. So I thought this would be a good moment to look at some of the other ways of finding empty homes.
Estate Agents
Estate agents are the first place most people think of when they are looking for a new home. But if you are looking for an empty house to rescue it will appear at first glance that they don’t have what you are looking for. This is not really surprising; estate agents are trying to promote new homes as desirable places to aspire to. A window display full of derelict old wrecks is hardly the image they are looking for.
Estate agents will normally have many more properties for sale on their books than those in the window display, on their website or the newspaper advert. Their properties will often fall into three categories. Hot cakes: new on the market quick selling properties that are likely to appeal strongly to the market. Plodders; houses that will sell in the end, but may not be everybody’s cup of tea, and lemons; properties that will only appeal to a specific segment of the market (or nobody all) and take ages to sell. Estate agents want to be associated with hot cakes, they want to give the impression they are selling lots of properties very quickly that are very appealing to purchasers. So these are the properties they market strongly. If they can’t sell a potential purchaser a hot cake they may drag the odd plodder out of the filing cabinet. Recycled house projects usually fall into the lemons category, and so don’t get promoted much if at all by estate agents. You won’t know whether these properties are for sale unless you ask. Of course estate agents will be happy to sell you any property on their books but they won’t want to alienate you as a purchaser and try and sell you a lemon unless you make it clear that that a lemon is what you want.
Walk The Streets
If you have a reasonably clear idea of the geographical location in which you want to buy a home, you could just have a wander round and see what properties are there. Don’t try and save time and drive instead, you won’t be able to look at the properties properly, or if you do you will probably crash your car. It’s amazing what you will see when you are walking; most roads have a few rather unloved looking houses on them. Some may be empty, and there may be the odd redundant commercial or agricultural building that may inspire you with its potential.
Auction Catalogues
The place that most potential house rescue projects come up for sale is at auction. Auctions are a quick and decisive way of disposing of property, which is why neglected properties that don’t have immediate saleability appeal are often sold through them. Loads of properties are sold through auctions every week.
For a comprehensive list of property auction houses in the UK and Ireland see here
Property websites
As the country wakes up to the possibilities of rescuing empty homes some websites have sprung up that can really help. The sites feature empty and neglected properties that are not actively marketed elsewhere.
One such site is www.propertyrenovate.co.uk this site is a portal for properties in London in need of renovation that are being marketed by estate agents. Many of these are the properties I talked about as lemons earlier and the estate agents may not be marketing them as strongly as other properties on their books. This site lets you see lots of them without the hassle of visiting each estate agent in turn.
Self-build plot finding agencies
With self-build housing becoming increasingly popular a whole industry has grown up to provide information on plots of land for sale. Many of the plots are just that; a plot of open land. But these are becoming increasingly scarce and most plot-finding lists have a large smattering of plots with empty and redundant buildings built on them. Some of these are wrecks that are no good for anything other than demolishing. But you may be surprised how many recycled house projects you can find this way. Most plot finding companies will require you to register for a fee and this will allow you to search their database in a few chosen county areas that you have chosen for a set period of time. Most agencies are web based, the main ones are The National Building Plot Register, Property spy, and Plotbrowser. In addition the main self build magazines have listings of available plots, although most of the information on them is sourced from one or other of the agency websites.
Derelict Historic Buildings
Several organisations working to save historic buildings publish catalogues of buildings they consider to be at risk, many of which are empty and abandoned. The catalogues make fascinating reading with everything from castles to greenhouses included. ‘At risk’ doesn’t always mean they are on the point of collapse, it can mean that the architectural features are in danger of being lost or damaged, or it can mean that the building’s use has become ambiguous or redundant. That being said the buildings featured have all been neglected by their owner, most are in poor condition and a few are downright derelict. The owners have not necessarily given permission for their property to be featured, and if you are interested in one you will need to find a way of getting the owner to sell it to you.The publishing organisations do not take a fee or commission if you manage to buy the property, but in most cases you will need to buy the register catalogue or a subscription to it for a few pounds.
Damned Beautiful is the currentcatalogue published by Save Britain’s Heritage (SAVE). This contains details of hundreds of properties across England and Wales (but not London). You can order of from their website www.savebritainsheritage.org
English Heritage’s buildings at risk register includes information on all grade 1 and 2* listed buildings known to English Heritage to be at risk in England and Wales. This is the only catalogue that covers London. You can get a copy of the register from English Heritage or view the whole thing on their website. Buildings at Risk Register
For properties in Scotland there is a buildings at risk register run by the Scottish civic trust buildings at Risk Office. They publish a buildings at risk bulletin which you can subscribe to. For properties in Northern Ireland The Ulster Architectural Heritage Society operates a buildings at risk register. In the Republic of Ireland the buildings at risk register is operated by An Taisce – the Irish National Trust.
Local Authorities
Yes its true most local authorities do have a list of empty properties in their area. (The ones that do are the ones that send out council tax bills. This is usually the district, borough or city council. County councils, and parish councils do not have records).
They collect information on whether properties are empty in order to bill people the correct council tax. Most local authorities use this information to inform their work on returning empty homes to use. An argument made by many people including me is that making this list available to people interested in rescuing empty homes is likely to result in some of the properties being sold, renovated and occupied. Not all local authorities agree.
However a new piece of legislation, The Freedom of Information Act, does give you more power to request the information. To find out more read this article How to Make a Request
A word of warning; if you make a request prepare yourself for a negative response. Most local authorities refuse requests sometimes with good reasons, sometimes with spurious ones. There are some notable exceptions and an increasing number of local authorities are taking a more positive view. Some local authorities are even considering posting lists of empty properties on their website for all to see.
Finding out who owns the property
Ask neighbours
People who live near to empty properties often know who the owner is. If you explain to them why you want to know they will probably be happy to tell you
Land Registry
Most properties are registered at the Land Registry. For a small fee you can look at the register and see who the owner is.
www.landregisteronline.gov.uk
Local authorities
Most local authorities have an empty property officer. It is their job to assist getting empty properties back into use. Most local authorities have a register of empty properties and know who the owner is. Local authorities have different policies on disclosing this information. If your local authority won’t tell you, you could put the request in writing citing the Freedom of Information Act 2000.
Reviewing your options
Five points to consider:
Economic viability - Ask your self these questions: How much is the property worth now? How much would it be worth in good condition? How much would it cost to renovate? How much rent would it command? Get advice from local estate agents and a surveyor to get accurate answers. The figures should help you decide the best option.
The housing market – Prices of property go up and down, and vary from one part of the country to another. One thing is certain though you’ll earn nothing if your property empty. Speculating is fine, but if you want to keep your options open find a short-term solution like a short tenancy, and review things again in a years time.
Security of income - If you have borrowed money to pay for work on the property you will probably be relying on rent to pay off the loan. Certainty of rental income is essential. A void period could result in defaulting on your loan repayments. Look out for leasing packages with guaranteed rent ask your local council.
The hassle factor - becoming a landlord is a viable and often profitable option for making use of your property. But it will involve you in a lot of work. Using a managing agent or leasing your property will probably reduce your potential income a bit, but it will reduce the agro factor too.
Legal Restrictions – It’s great to have imaginative plans for redeveloping your property, but if they won’t get planning approval or building control consent, you need to think again. Talk to the authorities sooner rather than later so you don’t waste time and money.
Are there any grants available?
Don’t bank on a grant, but see what’s available. Rescuing an empty property meets the objectives of lots of organisations some of them may be prepared to subsidize your costs. Here are a few you might try;
Local authority grants: Local authorities in England and Wales publish a housing renewal policy that says what they offer. Many of them offer grants to help with the costs of rescuing empty homes. Check first to see what the conditions are. A common one is that the finished home should be let to a housing association or the like for a few years. A number of local authorities now offer low cost loans as well or instead of grants.
Heritage Grants: If the home you are intending to rescue is listed, in a conservation area, or has some historical importance you may be able to apply for a grant to help rescue it. You can try The Heritage Lottery Fund and The Countryside Stewardship Scheme
Energy Efficiency Grants: There are lots of different schemes that run for limited times and in operate in specific areas. You won’t be able to apply for large amounts of money but every little helps. The best place to find what’s available is to use The Energy Saving Trust’s grant finder tool. Click here
Where is the best place to go for mortgages?
Mortgages can be tricky to find for rescuing empty properties. The problem is that old wrecks aren’t worth much until they are renovated. Many people want to borrow more money for the combined costs of purchase and renovation, than the property is actually worth in its wrecked state. From a lenders point of view this is high risk, because if you default on your payments the property isn’t worth enough for them to recover the loan if they repossess the property. Happily the situation is improving fast. The following far from comprehensive list features some of the lenders who have mortgage products particularly suited to rescuing empty properties.