Empty homes hit house prices

Areas with a relatively high number of empty homes are likely to have lower property prices, a new survey has claimed.

The study, undertaken by Halifax, revealed that house prices were 17 per cent lower in the local authority areas with the highest number of empty residential properties.

In total the research identified a total of 290,000 empty homes in the UK, representing a fall of nearly 20,000 compared to the figure indicated by the same survey three years previously.

Despite this, the study's authors highlighted the high VAT cost of renovating homes that have been empty for a short amount of time as a factor potentially dissuading people from improving vacant properties.

Martin Ellis, chief economist at the Halifax, said: "It is encouraging that the number of empty homes in England has fallen by nearly 20,000 over the past three years, but it is also notable that the problem has become worse in many areas with the highest number of empty homes."

"Rising property prices encourage the rejuvenation of empty homes in many parts of England," he added. "We would like the government to extend the five per cent rate of VAT for renovating an empty home to all properties vacant for more than six months not just those properties that have been un-occupied for more than two years."

Under current regulations, restoring a property that has been empty for less than two years attracts the full VAT rate (17.5 per cent), while only renovations of properties that have been vacant for more than two years are subject to zero VAT.

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