The UK faces a housing crisis, and one contributing factor is the surprising number of empty homes. With hundreds of thousands of long-term vacant properties in the UK, the government recently introduced new tax reforms that give councils the power to charge 100% council tax premiums on homes left empty for more than 12 months.
But what does this “empty home tax” mean for homeowners, especially those who are actively trying to bring their homes back into use? Here, we discuss the nation’s empty home problem, the potential impact of these tax reforms, and why securing home insurance for an empty house is a necessity during extended periods of vacancy.
The empty home problem in the UK
While the housing market has never been tougher for first-time buyers, the most recent Census data from 2021 reveals that there are 1.5 million unoccupied dwellings (including second homes and holiday homes) in the UK.
In England alone, there were an estimated 261,189 long-term vacant dwellings – properties that are left unfurnished and uninhabited for six months or longer – recorded across the country in 2023.
There are various reasons that properties become empty homes. It could be due to inheritance issues, negative equity on mortgages, or simply being a second home that is rarely used by the owner.
Regardless of the reason, empty homes create a social and economic burden. They contribute to a lack of available housing stock, can lead to neighbourhood decline, and prevent potential economic activity.
Government ramps up empty home council tax
The government recently launched new tax reforms to disincentivise property owners from leaving homes empty with properties left empty for longer than a year (reduced from two years) incurring 100% council tax premiums.
In Liverpool, the BBC recently reported that owners of properties that had remained empty in the city for more than a decade faced a maximum additional council tax premium of up to 300%.
Thankfully, for those homeowners who, through no fault of their own, are unable to bring their empty home back into circulation as quickly as they would like, a 12-month exemption is available in certain cases:
- Properties undergoing major repairs or structural alterations.
- Properties actively marketed for sale or let.
- Inherited properties.
At the other end of the spectrum, the empty home tax for owners who neglect their empty properties could lead to increased revenue for councils, act as a deterrent, and encourage these homes to be brought back into use.
Cross-party think tank the Social Market Foundation (SMF) has even proposed using the revenue from empty home taxes to provide rebates for private renters, making housing more affordable for those struggling the most.
Secure home insurance for an empty house
There is no doubt that bringing empty homes back into use benefits everyone. Not only does it increase housing supply but it also boosts local economies and can even contribute towards tackling homelessness.
Of course, there are various reasons why homes become uninhabited. If your property is empty due to protracted probate, sales or refurbishment processes, extended vacant periods are somewhat inevitable.
If your home is unoccupied for longer than 30 consecutive days, you will need to secure specialised Unoccupied House Insurance. This type of insurance provides financial protection from potential issues like vandalism, burst pipes, or weather damage – all of which are deemed a greater risk when a property is left empty.
UKinsuranceNET offers policies from a host of recognised insurers to give you valuable reassurance that your investment is protected while your property remains empty.
A brighter housing future
The UK is taking steps to address the empty homes issue. By combining tax disincentives, government initiatives, and repurposing efforts, the country has an opportunity to unlock the potential of long-term vacant properties.
If you own a long-term empty home, explore your options. Where possible, consider selling, renting it out, or discussing the situation further with your local council.
In the meantime, if your property is likely to be unoccupied for an extended period, for whatever reason, remember to purchase adequate cover with specialised Unoccupied House Insurance.
Get a free, instant online quote for Unoccupied House Insurance from UKinsuranceNET or speak with one of our experts on 01325 346328 to discuss your needs in more detail.
