16th March 2020
How much is your vacant property costing you each month?
Owning an empty property can be an expensive business and, from this April, it could cost you even more. Andrew Parker, Managing Director at SDL Auctions, outlines some of the costs and offers a quick and practical solution to the problem.
There are many reasons for a property standing empty. It could need repairs which the owner cannot afford. It could have been inherited and the family cannot decide what to do with it. The owner may have moved away and not got round to selling it.
Whatever the circumstances, the one thing vacant homes have in common is that they all cost their owners money.
And it’s not just the lack of rental income; even if the property isn’t mortgaged, the monthly outgoings can add up to hundreds of pounds.
One of the biggest costs can be council tax – and, if your property has been standing empty for a long time, this could increase considerably from April.
In a drive to reduce the number of properties standing empty and turn them back into homes, the government has given local authorities greater powers to increase council tax on vacant dwellings.
- Since April 2019, councils can charge a 100% premium on top of the usual council tax rate, doubling the bill for owners of properties which have been unoccupied and unfurnished for two years or more.
- From 1 April this year, councils have the option to charge a 200% premium – trebling the bill – for properties which have stood empty for five years or more.
- And if your property has been vacant for 10 years or more, from April 2021 your local authority could charge you a 300% premium, making the bill four times the usual rate.
The vacant period is based on the property, not ownership, so even if you only purchased a property recently, you could find yourself with an inflated bill if you leave it vacant.
Recent figures show that the numbers of empty dwellings are increasing in most areas across England too, with long-term vacant properties (which have been empty for six months or more) rising to 216,186 by October 2018, a 5% increase on the previous year.
The owners of these empty properties could improve their finances if they sold them at auction. If you have a vacant property and would like to find out more, call us on 0800 304 7879.
As well as the council tax consideration, all these properties require insuring – particularly as empty homes can be a target for vandals, squatters, rodent infestation and criminals operating cannabis factories. Due to the increased risks, not all companies will insure empty properties and you can expect to pay more than for standard buildings cover.
Maintenance should not be overlooked, too, as an empty building can rapidly deteriorate. If you are not able to check on the property frequently, you may need to pay someone to visit regularly to check for leaks, flooding and other damage.
An overgrown garden is a sure sign that a property is no longer being cared for, so maintaining this yourself or paying a gardener would be a sensible move to deter unwanted attention.
By the time you have added up council tax, insurance and maintenance costs, a property you previously considered to be an asset could soon be seen as a liability.
The good news is that, at auction, there is a demand for properties of all conditions. We have a wide network of investors and developers looking for vacant properties requiring refurbishment so, if your empty property is costing you money, why not get in touch with our auctions team?
We run room auctions in five locations around the country as well as selling properties via online auction. Contracts are exchanged at the fall of the hammer or when the online auction ends, providing you with speed, certainty and transparency. To find out more, call 0800 304 7879 or click here and request a call back.