New data from Open Property Group reveals a stark contrast between vacant homes and new build sales in England. Birmingham leads with 5,496 empty houses, followed by Liverpool with 4,880. Meanwhile, Cambridge, Gloucester, and St Albans report the fewest vacancies, ranging from 310 to 392. This disparity highlights not only regional differences but also the broader challenges in the housing market, where some areas struggle with oversupply while others face acute shortages.
Vacant Homes vs. New Builds: A Mismatch
The data highlights a disconnect between vacant properties and new build sales. Birmingham, despite its high vacancy rate, saw only 337 new build sales in 2022. Liverpool and Sheffield show similar trends, with 114 and 44 new build sales, respectively, against thousands of empty homes. This mismatch suggests that new builds may not be meeting the needs or budgets of potential buyers in these cities. Additionally, Leeds, with 2,693 vacant houses, recorded only 274 new build sales, further emphasizing the imbalance. The concentration of vacant properties in major cities points to systemic issues in housing distribution and affordability, rather than a simple lack of supply.
The Office for National Statistics notes that Midlands cities are particularly struggling with new build sales. Nottingham and Leicester recorded just 2 and 6 sales, respectively, so far this year. These figures show the regional disparities in housing demand and the economic pressures faced by buyers in these areas. The Midlands, historically a hub for manufacturing and industry, may be experiencing slower housing market growth due to economic shifts and lower disposable incomes.
Revitalizing Vacant Properties: A Potential Solution
Jason Harris-Cohen, Managing Director of Open Property Group, suggests that vacant homes could be part of the solution. He notes that new builds are often priced at a premium, making them less accessible during the current cost-of-living crisis. Harris-Cohen points out that vacant properties, if renovated, could provide affordable housing options without the need for extensive new construction. This approach could also reduce urban sprawl and make better use of existing infrastructure.
Revitalizing vacant properties, Harris-Cohen argues, could offer affordable options for buyers. However, he acknowledges that current owners may lack the resources to renovate these homes. He proposes that compulsory purchase orders and empty dwelling management orders could be more effectively utilized to address this issue. By enabling local authorities to take control of neglected properties, these measures could facilitate their renovation and reintroduction into the market. This would not only increase housing supply but also improve the aesthetic and economic value of neighborhoods.
The debate over whether England faces a housing shortage or a distribution problem continues. While Homes England reports 37,164 completed homes and 38,436 started in 2021-2022, over 44,000 properties remain vacant in 2022. This raises questions about how existing stock is utilized and what buyers can realistically afford. The focus on new builds may be overshadowing the potential of vacant properties to address housing needs more immediately and cost-effectively.
The Broader Context
The housing market’s challenges are compounded by rising mortgage rates and economic pressures. While new builds are often marketed as solutions, their premium pricing may deter buyers. Vacant properties, if renovated, could provide a more immediate and affordable option, though this requires addressing barriers like ownership and funding. Local governments and private developers could collaborate to create incentives for renovating vacant homes, such as tax breaks or grants, to encourage investment in these properties.
Harris-Cohen emphasizes the need for the industry to reassess its approach. “The statistics don’t always support the headline of a ‘chronic housing shortage,’” he said. “We need to look at how existing stock is utilized and what buyers can afford in the current climate.” His call for a shift in focus from new construction to the renovation of existing properties reflects a growing recognition that the housing crisis may be as much about distribution and affordability as it is about supply. By leveraging vacant homes, the industry could create a more balanced and accessible housing market that meets the needs of a wider range of buyers.
