Empty and derelict properties – patience is wearing thin, and we need to act now

Patience is wearing thin. After years of rising costs, missed building targets, and broken promises, it’s become clear that people want to see real change. For many, it’s obvious where we should start to get the housing and property markets back on track.

For our Q4 independent research, we surveyed 2,000 UK adults who were spread across the property ownership spectrum. We heard from those who owned their property outright, renters, landlords, and more.

We wanted to get an idea not only of how widespread the issue of empty or derelict properties is across the UK, but also of where action is sorely needed the most. As the results showed, the scars of the lockdown years are still with us, nearly four years after the worst of the pandemic.

Nearly half (46%) of all the respondents agreed, or strongly agreed with the statement: “I have noticed an increase in the number of empty/derelict properties (residential or commercial) in my local area over the past five years”.

Regionally, a few key hotspots emerged where the pressure is on to finally get to grips on this issue. London (45%), the North East of England (44%), and Wales (38%) had the highest proportion of people who felt their local areas suffered from having too many run-down, empty, or derelict properties outside of Scotland and Northern Ireland.

Evidently, many in these regions have had enough of inaction. They want the government, owners, and property investors alike to embrace real progress. They have certain preferences on the kinds of changes they want to see put in place too. The kinds that could give property investors food for thought.

The pressure is on, but what do people want?

When it comes to remedial action, people appear to no longer have faith that the market knows best. Self-regulation is out of fashion, and many want to see much more state intervention.

The vast majority of respondents in London, the North East, and Wales believe the government should do more to incentivise people to buy and renovate derelict, empty properties. What’s more, 56% of those in Wales want to see stricter regulations to prevent people from leaving their property vacant or derelict. This rises to 60% in London, and 67% in the North East.

Landlords in particular should take note. Half of respondents in London and Wales want to see landlords who own properties (residential or commercial) that have been empty for more than 12 months be forced to sell them. In the North East, it’s 67%.

The message is clear. In these areas, people want to see change when it comes to derelict spaces. It can be exhausting and disheartening to see boarded up windows and empty flats for months on end. But what exactly do people want to see in their place?

Well, it depends on where you’re looking – or targeting.

When presented with a number of options for how empty properties cold be better utilised, what emerged on top for Londoners was for the buildings to be used for community/shared spaces (72%). Those in the North East and Wales simply want to see residential stock rise.

Over three quarters (76%) of Welsh respondents said they want to see empty properties be made available as residential homes, as did 71% of those in the North East.

Industry participants need to come together in harmony

Jeremy Hunt just delivered his Autumn Statement and unlike the Spring Budget, there were a fair few housing announcements. Local Housing Allowance increases are on the way to lower income tenants, £110m has been set aside for the building of 40,000 more homes, and new permitted development rights changes should allow for more conversions.

But of course, we need to remember that what’s eventually delivered may be drastically different to what was promised. Michael Gove, our current Levelling Up secretary, has announced many drastic sounding changes during his tenure. But, many of these plans ended up watered down or scrapped entirely down the road.

Take the Renters’ Reform Bill. It was meant to completely upend the market, and provide more security for tenants. But, barely a week after it was unveiled, backtracks were made to proposed student let rules.

We’ve also seen back-peddled plans on gas boilers, leasehold reform, and EPC regulations. Also, we need to remember that all of these plans, watered down or not, could be rendered moot in mere months.

A general election could happen as soon as Spring 2024 and we could see a Labour government in power by the end of next year. This will mean entirely new plans for the economy, and the property market.

Clearly, to get the housing market working for all, everyone is going to have to play their part. No single element is going to solve the challenges we’re facing. State support is needed, but so too is entrepreneurism from investors, clear guidance from regulators, flexibility from lenders, and confidence from renters and buyers.

Fortunately, there are signs that proactivity is being prioritised. In London for example, where supply is lacking and empty commercial hubs take up too much space, property investors are taking notice.

Abandoned commercial spaces in central London have been transformed in recent months, as demand for offices waned. In place of rows of empty desks, we now have bustling food markets, mini-golf courses, and event spaces.

Indeed, in 2023, investors pumped at least £2bn into unwanted London offices, converting them for new purposes. Flexible working is still widespread and as a result, we’re finding there’s more desire for student accommodation, hotels, and even laboratories.

There’s motivation out there to do something with all our empty space. Providers in the property scene must be ready to meet utilisers in the middle. Especially where people are growing impatient.