Channel 4 has mounted a campaign to highlight the so-called ‘Great British Property Scandal’ of empty homes in the UK. Thousands of people are getting involved in the campaign to bring the estimated 930,000 uninhabited properties back into use and the government even recently announced in its 2011 housing strategy that it will be pledging £100m towards bringing some of Britain’s homes back into use to cut housing waiting lists and stabilise housing supply. Sounds like a great idea but are we simplifying what could be a major legal and bureaucratic undertaking as a quick and easy solution to a growing problem? And what about the real whole life costs of such a decision?
Making use of the hundreds of thousands of empty homes across the UK to cut waiting lists for social housing and stabilise the housing market in areas where demand far outstrips supply does seem to be on the surface an excellent solution to the problem.
There are potentially up to 1 million empty homes across the UK but bringing those properties back into use could represent a legal and financial nightmare for local councils who are already feeling the pinch of government cuts on staff-levels and cash flow. Yes, there are empty properties in the UK and yes, there are people who want to live in them but unfortunately doors can’t just be opened and people invited to make themselves at home. The Daily Mail would have a field day for starters.
Thinking logically, the government and local councils need to decide if it is even feasible to bring these properties back into use. Aside from the financial and legal headache of CPO’s or an empty homes ‘tax’ on owners, there is the rather glaring problem of just what state some of these properties are actually in. Whilst a large chunk of new build schemes are currently lying empty, older properties which have been empty for two years or more are likely to require a good deal of investment to bring them up to the standard required by the government for any kind of social housing.
Indeed, a housing association taking on just 50 properties which have been uninhabited for two years or more could lead to hundreds of thousands of pounds in renovation, repair and maintenance works to get the property to a liveable standard. It could be argued that this work would mean the housing association or council is investing in the value of its assets but how many new properties, with more energy efficient technology, could be built for the same money, to last longer? The whole life cost of such a decision is missing from the equation. Take a typical 3 bedroom house for example; the capital costs of renovation of a run-down property to meet the “Decent homes Standard” could easily be as much as £10,000 per dwelling and the on-going cost of maintenance as much as £2,000 per year plus future asset renewals. This could mean that an empty house costing nothing to keep empty could cost £30,000 over 10 years before significant energy bills and other costs are taken into account. Income from rent and the costs of alternative housing must be factored in as part of a proper business case.
It is to address this kind of problem in the housing sector that we created kykloud in the first place. To be able to input survey data and receive real-time reports on the whole life cycle cost of a property means that housing associations could assess the longer-term financial commitment involved in bringing uninhabited properties back into use. All aspects of a property, from repair and maintenance plans to value can be monitored from 5 to 30 years and beyond allowing housing associations and councils to make a decision based on long-term financial forecasts derived from real data.
Solving the housing crisis is an emotive subject for many and bringing empty homes back into use is most definitely a route that needs to be explored but it is essential that the decision is taken with the full knowledge of the long-term financial implications this could involve using whole life cycle costing.