Investor warns Labour empty homes plan lacks funding and risks failure

Investor warns Labour empty homes plan lacks funding and risks failure

Labour’s proposal to reduce the period before councils can intervene in empty homes has been criticised by a property investor as a likely failure without proper financial support for repairs.

Labour’s plan to empower councils to take control of empty properties after six months, down from two years, aims to address housing shortages by bringing empty homes back into use. However, concerns have been raised about the practicality of this approach given local authorities’ current financial constraints and the condition of many empty properties.

Labour’s Empty Dwelling Management Order reforms

At Labour’s annual conference last month, Housing Secretary Angela Rayner announced reforms to Empty Dwelling Management Orders (EDMOs). These reforms would enable councils to take control of empty and derelict homes once they have been unoccupied for six months instead of the current two-year threshold. Under these powers, councils could manage and rent out these properties to people in need of housing.

This policy aims to tackle the estimated 300,000 empty homes across the country, many of which are seen as a wasted resource amid rising homelessness and housing demand. The government’s intention is to increase the supply of available homes by utilising properties that have remained vacant for extended periods.

Investor’s concerns on funding and feasibility

Elliot Castle, chief executive of We Buy Any Home, has expressed scepticism about the effectiveness of Labour’s plan without adequate funding. He points out that over half of the 300,000 empty homes are uninhabitable and require significant repairs before they can be rented out.

“Who’s going to pay for that? Is the local authority going to pay for that?” Castle questioned, highlighting the financial pressures faced by councils. He noted that many local authorities are struggling to maintain basic infrastructure and services due to budget constraints.

Castle described the plan as a “PR stunt” that suits the Labour government politically but may not deliver practical results. He emphasised the need for financial support to bring these empty homes back into a habitable condition rather than relying solely on councils to take over properties.

Context of local authority finances and housing pressures

Local authorities in England have faced ongoing budget cuts and rising demand for services, which complicates their ability to take on additional responsibilities such as managing and repairing empty homes. The cost of refurbishing derelict properties can be substantial, and without dedicated funding, councils may be unable to act effectively.

The housing crisis, with long waiting lists and increasing homelessness, adds urgency to finding solutions for utilising empty homes. However, the balance between enforcement powers and practical support remains delicate. While stronger EDMO powers could incentivise owners to bring properties back into use, the lack of resources for councils to intervene meaningfully could undermine the policy’s impact.

Practical implications for landlords and agents

For private landlords, the proposed reduction in the empty period before council intervention could increase pressure to maintain occupancy and property condition. Properties left empty for six months may attract closer scrutiny from local authorities, especially in areas with acute housing shortages.

Letting agents may see an uptick in demand for their services as landlords seek to avoid the risk of council takeover by promptly letting their properties. Ensuring properties are well-maintained and quickly re-let could become even more critical to avoid enforcement action.

Landlords should also be aware of the potential for additional local licensing or regulation linked to empty homes and prepare to respond to any new requirements. Maintaining clear records of property condition and efforts to let the property may help in any disputes with local authorities.

Uncertainties and areas to watch

The details of how the funding for repairs would be managed remain unclear. Whether the government will provide grants or financial assistance to councils or property owners to refurbish empty homes is yet to be confirmed.

There is also uncertainty about how councils will prioritise properties for intervention and the criteria they will use to determine when to step in. The impact on probate properties and other special circumstances has been raised as an area requiring careful consideration to avoid undue hardship.

Landlords and agents should monitor developments closely and check official guidance as the policy evolves. The balance between enforcement and support will be crucial to the success of these reforms.

What landlords should consider now

• Review the occupancy status of your properties and ensure they are not left empty for extended periods without good reason.
• Maintain properties in good condition to avoid them being classified as uninhabitable, which could trigger council intervention.
• Keep detailed records of efforts to let properties, repairs undertaken, and communications with tenants or prospective tenants.
• Stay informed about local authority policies on empty homes and any emerging licensing or enforcement measures.
• Consider engaging letting agents to reduce void periods and manage properties efficiently.

Supporting landlords with compliance and property management

The Landlord Association (TLA) offers membership resources that can assist landlords and letting agents in managing properties effectively amid changing regulations. TLA’s compliance materials provide guidance on maintaining property standards and meeting legal obligations.

Additionally, TLA is developing ORBIT, a new property management and compliance platform currently in BETA testing. ORBIT aims to help landlords organise property records, monitor compliance tasks, and keep documentation accessible. Features in testing include tools for recording repairs, inspections, and communications, which are particularly relevant as scrutiny on empty homes increases.

Exploring TLA membership and ORBIT BETA access can provide practical support for landlords preparing for new enforcement powers and regulatory changes.

Looking ahead, the success of Labour’s empty homes plan will depend heavily on the availability of funding and the capacity of local authorities to manage and refurbish properties. Landlords should remain vigilant and proactive to adapt to any new requirements as they emerge.

Sources: Landlord Today