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Profit from Empty Homes
08.03.10
Figures from the Office of National Statistics show that the number of empty properties in the UK stood at 651,993 in 2009. Many will end up in the auction room and data from the Essential Information Group indicates that approximately 85 per cent of residential properties sold at auction last year were unoccupied when they went under the hammer.
Empty properties often have a variety of incentives and assistance available to help restore them so that they can be lived in.
Chris Baguley, director of Auction Finance Limited, who provides funding for auction purchases, discusses the various financial incentives available once the purchase is complete:
"Many local authorities have a Housing Renewal Policy who may supply grants to assist with the cost of renovating empty properties in the area. However, potential applicants should be aware that if they plan to lease the property then such grants often come with conditions attached, such as having to rent to a council tenant for up to 5 years. Additionally, the availability of such grants can vary considerably between different authorities and investors should consult with the relevant authority within the area that they are looking to buy.
"There are plenty of grants available to help investors restore a property to its former glory. Most local authorities have an empty property officer who can advise on the grants available in the area. You should check not only what's on offer, but also the eligibility of the property in question before you make a bid.
"If you do qualify for a grant, check for any conditions, as some may specify that you have to rent to a council tenant for up to five years after the refurbishment is complete.
"Energy Efficiency Grants should also be investigated. Contributions towards the cost of installing a new heating system or making improvements to the building's insulation may be covered by a local grant. There are also national grants which you may be able to benefit from such as the current boiler scrappage scheme. Again, check this out before bidding.
"As well as grants, renovators can get tax breaks on the work carried out on empty properties if they have been vacant for a certain period of time. If the property has been empty for more than two years then refurbishment expenses are subject to a reduced VAT rate of 5%. If it has been empty for more than 10 years it is reduced to 0%."
"There are plenty of grants available to help investors restore a property to its former glory. Most local authorities have an empty property officer who can advise on the grants available in the area. You should check not only what's on offer, but also the eligibility of the property in question before you make a bid.
"If you do qualify for a grant, check for any conditions, as some may specify that you have to rent to a council tenant for up to five years after the refurbishment is complete.
"Energy Efficiency Grants should also be investigated. Contributions towards the cost of installing a new heating system or making improvements to the building's insulation may be covered by a local grant. There are also national grants which you may be able to benefit from such as the current boiler scrappage scheme. Again, check this out before bidding.
"As well as grants, renovators can get tax breaks on the work carried out on empty properties if they have been vacant for a certain period of time. If the property has been empty for more than two years then refurbishment expenses are subject to a reduced VAT rate of 5%. If it has been empty for more than 10 years it is reduced to 0%."