RICS presses for change in VAT rules to bring abandoned houses back into use

Published 22nd Dec 2008

The Royal Institution of Chartered Surveyors is calling for a cut in VAT on renovation work for all empty homes


The Government could house tens of thousands of families if it took steps to help to bring Britain's empty homes back into use, according to a report by the Royal Institution of Chartered Surveyors (RICS).

Government figures show that 1.6 million households are on council housing waiting lists at present, while 72,130 families will be living in temporary accommodation over Christmas. RICS estimates that homes for most, if not all, of these could be found if the Government were to take the appropriate steps to bring empty properties back into use.

Many homes remain empty because they are in very poor condition and the owner is unable or unwilling to spend the money to make them habitable. Once a home is empty, its condition can deteriorate quickly, pushing the cost of renovating it still higher. Local authorities have the power to issue Empty Dwelling Management Orders (EDMO) on properties that have been vacant for six months or longer, but RICS is calling for the Government to make it more attractive for the owners of these empty properties to take action by reducing VAT on the renovation and repair of buildings from 15 per cent to 5 per cent.

The Government has taken small steps by introducing this discount for properties that have been empty for more than two years. RICS says that the Government needs too ffer this discount for all empty properties.

James Rowlands, the policy officer of RICS, said: “We would like to see VAT cut across the board to 5 per cent. Thousands of homes should not be allowed to stand empty while people are homeless or suffering from poor living conditions. The Government must use all its powers to bring these homes back into use by reducing VAT on repair of buildings and reinforcing council powers.”

The RICS stance is supported by the Empty Homes Agency. Henry Oliver, its policy adviser, said that only a targeted and substantial cut would help to end an increase in empty homes and that the Chancellor had missed the opportunity in the Pre-Budget Report last month to cut VAT on the renovation and maintenance of existing properties. Mr Oliver said: “These are really good proprosals from RICS, which could potentially provide much-needed housing at a time when housing lists are rising.

“Additional benefits would be the regeneration of blighted neighbourhoods and the provision of building jobs at a time when the industry is struggling.”

The Government offers financial incentives to housing associations to encourage them to buy up empty new-build properties. The Empty Homes Agency would like to see this policy applied to older properties in order to provide a wider range of affordable housing.

The number of people homeless or in temporary housing is set to rise as forecasts from the Council of Mortgage Lenders show that repossessions will hit 45,000 this year and increase by 67 per cent in 2009, taking them to the rate in the recession of the early 1990s.

Source: ' times '

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