There is a widely acknowledged shortage of housing in the UK. However, the latest government statistics from November 2023 revealed that 261,189 long-term empty properties in England have been vacant for at least six months. That represents a 16% increase since 2019.

Since the government mothballed its Empty Homes programme in 2015, empty property grants in the UK have become increasingly few and far between.

Now, landlords are faced with a postcode lottery as to whether their local council has maintained their own funding programme to rejuvenate empty homes.

A brief history of empty property grants

Towards the end of 2011, the government’s Homes and Communities Agency announced that some £100m capital funding was being made available to bring empty homes back into use during the period 2011 until 2015.

By June of 2013, the Department of Communities and Local Government announced that a further £91m was being made available.

The funding was allocated on a regional basis and, by way of example, the first tranche was intended to achieve delivery of the following number of new homes during the period 2012-2015:

East and South East – 748 homes;
Midlands – 1,289 homes;
North East, Yorkshire and The Humber – 945 homes;
North West – 1,075 homes;
South and South West – 480 homes; and
London – 1,118 homes.

However, as we mentioned earlier, with more than a quarter of a million long-term unoccupied properties lying vacant in England alone in 2023, it is clear that the scope and scale of the Empty Homes programme fell some way short of alleviating the issue of dwindling housing stock and growing demand for rental properties.

Regional allocation of empty property grants in the UK

Regional funding for empty property grants was made available for distribution by local councils.

Since the central government funding was abolished, some local councils took it upon themselves to maintain their own funding programmes, with their own policies, rules and conditions when it comes to allocating grants for empty housing.

A typical scheme is Chelmsford City Council’s Private Lease Agreement Converting Empties (PLACE) Empty Homes Loan Scheme, which provides grants in the form of interest-free loans of up to £50,000 for bringing empty housing back into use.

Once refurbishment has been completed, the scheme allows the owner either to sell the property or to let it at a market rate.

Elsewhere, the Welsh Government’s National Empty Homes Grant Scheme is delivered by Rhondda Cynon Taf County Borough Council in partnership with participating Local Authorities across the Principality.

The Scheme provides grants of up to £25,000 towards the cost of repairs, provided that landlords make energy efficiency improvements and make a mandatory contribution of 15% towards the total cost of eligible works.

The following are just some of the councils across England that still offer some form of financial assistance for empty properties:

Incentives

Probably the single biggest incentive for buying, converting and releasing a previously empty home into the let property market is the discount often available on standard rates of VAT.

There are effectively two schemes operated by HM Revenue & Customs, depending on how long the property has been empty until you start to renovate or adapt it for use again as a home.

If the property has been empty for the previous two years, for example, any of the work carried out by a contracted builder, carpenter, electrician, plumber or other trade, qualifies for a discount from the standard rate of 20% VAT down to just 5%.

If the property has been empty for the previous ten years and you are converting what was previously non-residential property (that is to say, commercial premises, agricultural buildings or a church) you may qualify for zero-rated VAT.

The reduced rate of VAT applies only to work carried out by those doing the work for you and is made on condition that the property is to be used as a single dwelling or a number of separate dwellings (such as flats) for sale or for rent upon completion of the works.

Don’t forget Unoccupied Property Insurance

If you are a landlord interested in taking advantage of an empty property grant scheme and your local council happens to offer one, it is important to remember that during the course of the refurbishment works you are likely to need Unoccupied Property Insurance – a product that we specialise in providing here at UKinsuranceNET.

Refurbishing a property can expose it to various risks such as theft, vandalism, fire, or water damage. Unoccupied Property Insurance provides cover for these risks, ensuring that your investment is protected during the refurbishment process.

This is essential if the property is likely to stand empty for more than 30-60 days.

UKinsuranceNET’s personalised customer service is backed by a combined total of 20 years of experience in this specialist area of property insurance.

As such, you can have total confidence that you are dealing with a company that has grown to become one of the UK’s leading UK insurers.

Get an instant quote for Unoccupied Property Insurance at UKinsuranceNET today.

NB: This blog was first published in September 2014 and has since been updated to provide the most accurate and up-to-date information available.

What are Empty Property Grants? (2024 Update)

A brief history of empty property grants

Regional allocation of empty property grants in the UK

Incentives

Don’t forget Unoccupied Property Insurance

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