Property Development How To Rescue An Empty Property

Date Published:

09/06/2008

So you've found your dream property, but who does it belong to? The owner could be your local council or housing association, private individual or a company. It's a good idea to speak to neighbours and locals, as many will probably know who owns the property and would be pleased to see it occupied rather than derelict.

Most UK properties are registered at the Land Registry, and for a small fee of a few pounds, anyone can look at the register to uncover ownership details. And some councils will have a register of empty properties and their owners; however many do have differing policies in giving out this type of information. Again, it is often worth putting any request in writing citing the Freedom of Information Act.

If the owner is reluctant to sell, your local authority may be able to help if they are keen to see derelict buildings in the area brought back to use - and most are. They may visit the property, speak with the owner, offer advice and assistance, and if necessary, take action - legal or otherwise - to see the property occupied once again.

What's It Really Worth?

If the owner is interested in selling the property, you need to agree a price you are happy with. And, while you might be able to achieve a knockdown price, just because a property is empty and in need of renovation, it doesn't automatically mean it will be hugely cheaper than neighbouring properties. Owners will possibly ask for the market price, less the estimated cost of a refurbishment.

Bear in mind some local authorities have schemes to assist with returning vacant properties back to use. This is called an empty home grant, and you can be allocated anything up to £12,000 to assist with refurbishment or conversion.

However once a sale price is agreed, you will need to follow all the usual steps for buying a home from arranging the finance, having the building surveyed, to all the other legal formalities which can be carried out by a solicitor.

Can I get a mortgage?

Getting the necessary finance to buy an empty property can be tricky as many banks see these buildings as an unsafe investment. Also, many people seek to borrow additional funds on top of a mortgage for the essential renovations, but lenders often find this risky, as a default in repayments and a subsequent repossession will land them with a property which isn't worth enough to recover the loan.

But all is not lost as we now have many lenders offering specialist products specifically for the purchase of empty properties. There institutions include Buildstore, Halifax, The Co-operative Bank and The Norwich and Peterborough Building Society. Certain building societies, such as the Ecology Building Society and the Norwich and Peterborough Building Society, also offer eco mortgages, which cater specifically for people wishing to refurbish derelict and dilapidated homes.

Halifax is also currently calling for a VAT cut on renovations. Martin Ellis, at Halifax, said: 'We would like the Government to extend the 5 per cent rate of VAT for renovation on empty homes to all properties vacant for more than six months, and not just those properties that have been unoccupied for more than two years'.

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