The space race

Few of us could afford to own a car and leave it unused. Think of the depreciation in value and the lost opportunity to get from A to B. But it's not the same for homes: a lot of people and organisations own property only to leave it standing empty.

There are about 730,000 empty homes in England. There are legitimate reasons for many of them being empty. Some are in the process of being sold and the owner may have already moved into a new home, or a home may have been bought but be in need of renovation. But an underlying problem of long-term empty properties remains. At present, about 307,000 homes in England have been empty for more than six months: that's equivalent to a city the size of Leeds lying uninhabited. In addition, the government estimates that vacant commercial property – space above shops, offices and industrial buildings – has the potential to create a further 120,000 homes.

With an oversupply of housing in parts of northern England and acute shortages in parts of the south, it is easy to see why empty property is on the government's agenda.

As well as being a wasted resource, empty properties are often a magnet for vandalism and antisocial behaviour.

The Empty Homes Agency estimates that more than half of local authorities now have dedicated empty-property officers working to broker the reuse or conversion of empty properties. But as government guidance issued last month points out, the challenge of bringing empties back into use lies in responding appropriately to the different reasons for their condition.

For instance, one owner may have invested in the property to profit from its capital value while the local market improves, and have no intention of renting it out; another may have inherited a property from a relative and have no idea how to bring it back into use. In the first case, the council will be seeking to broker reuse or conversion; in the other, the owner will be in need of support.

Finding the empties
Unless the authority intends to deal solely with the properties referred to it by the public, the first step in bringing empties back into use is to identify where they are. This is vital for identifying priority cases.

In some areas, low demand can lead to abandonment and empty properties are often concentrated in particular areas, well-known to the council. But one unexpected finding of research into empty properties is that areas of high housing demand can have just as many empties as low-demand areas; they're just harder to find, tucked away above shops or forgotten high up in blocks of flats.

Locating empty properties can be a daunting task, but there are ways of making it easier. If a house condition survey has recently been undertaken, this may yield good information. Organisations such as the emergency services, who deal with squatters or arson, can provide other useful details; property agents and even refuse collection teams may also spot empties.

Once identified, the next step is to select the highest priority properties. The length of time the property has been empty, its condition and whether it falls within a strategic regeneration area are just some of the factors to be considered.

Tracking down the owners
Identifying the owner of an empty property is often not straightforward. Useful techniques range from talking to neighbours and businesses to land title searches and even detective agencies. In extreme situations, councils have legal powers to requisition information from people they suspect may know the owner.

If the owner can be identified, brokering the reuse of the property can begin in earnest. In some cases this may be a quick process. Perhaps the owner needed a grant? Small sums, up to £25,000, may be available from the council. For larger projects, local regeneration schemes or organisations such as regional development agencies or English Heritage may be able to give grants.

In some cases, owners may be unwilling to bring the property back into use, even with financial incentives. This often leads to more drawn-out negotiations. If an impasse arises, the council may be forced to use enforcement powers to address problems such as a dangerous structure or rat infestation. Requiring the owner to spend money on the property in this way may make them think again; but if this still doesn't work, the council may need to use further legal powers to secure the disposal of the property to a private or social landlord prepared to bring it back into use. This may also be appropriate where the owner cannot be identified, even after all the steps referred to above.

Eliminating barriers to reuse
Once brokering, if required, has been successful or if the owner has taken the initiative to bring a property back into use, there are still several important steps to take. The first is to assess whether it is feasible to bring the property back into use and, if not, what can be done to improve its feasibility.

The first test of feasibility concerns the practicality of reuse or conversion. A range of potential barriers must be considered here. What type of accommodation is needed in the local area – private sale, rent or other forms of tenure? Is the property likely to secure statutory consents, such as planning permission and building control approval? Do other people hold legal rights that may prevent the proposals? Neighbours may have the power to prevent the conversion of a property into residential use.

Is the property capable of accommodating the necessary physical changes? This is particularly important if the property was not originally built for housing. For example, converting space above a shop into a flat may require provision of a separate entrance.

The second test concerns financial viability. The starting point is to consider the resale or rental value of the completed home(s), minus any costs involved in bringing the property back into use. Costs may include refurbishment, professional fees and securing consents. However, it is important to add on the savings made from holding an empty property, such as reduced-rate insurance and council tax.

The third test concerns deliverability. For example, although the project may make financial sense, a bank loan may be necessary and the bank may look for security and experience of undertaking similar projects.

Having considered these tests, you may decide that the project is not initially feasible. Not every attempt to bring an empty property back into use will prove successful. But there are a significant number of steps that can be taken. If legal rights affect the property, it may be possible to negotiate with the beneficiary to remove these. If the finances do not stack up, it may be possible to secure a pre-sale or pre-let agreement, which may also help to convince the bank that there is market interest in the scheme.

Different actions will be needed in different situations and the Office of the Deputy Prime Minister's guidance outlines a broad range of potential approaches, including case studies showing this in practice. However, the most important thing is for councils and owners to work in partnership.