England needs around 300,000 new homes every year to meet need and improve affordability. But over the last five years, annual delivery has only averaged 230,000 homes.

In 2022 there were 676,304 total vacant dwellings registered in England, up slightly from 653,025 in 2021. This translates to a countrywide vacancy rate of just 2.7 per cent.

Could bringing empty homes back into use be part of the solution to this supply challenge?

Source: Savills Research using DLUHC

Of the total number of empty properties, 248,149 are long-term vacancies, meaning they have been registered as unoccupied for more than six months. Barrow-in-Furness and Liverpool take the top two spots with 2.6 per cent and 2.5 per cent of stock long-term vacant. At the other end of the spectrum, eight out of the ten local authorities with the lowest vacancy rates are in the South East or London, all with rates of less than 0.4 per cent.

Could vacant homes be used to increase housing supply?

A significant number of long-term vacant homes have already been brought back into use. In 2008, England reached its peak in long-term vacancies at 326,954, which by 2022 had already fallen by -31.8 per cent to 248,149.

The North West of England has been most successful in reducing these long-term vacant homes. Its long-term vacancy rate has already halved from 2.4 per cent in 2008, the biggest in the country, to just 1.2 per cent in 2022. Local authorities with the largest reductions since the peak include Manchester, where numbers decreased by -80 per cent, while nearby Salford has fallen by -74 per cent.

However, this means that most of the properties that are easiest and economically viable have already been brought back into use. Remaining long-term vacant properties are not necessarily suitable for reuse.

The recent low rates of demolition and replacement have increased the implied ‘life expectancy’ of existing homes, where the average home in the North would have to continue housing people for over 3,000 years. Older homes remain standing, even if they are not fit for purpose or up to current standards.

However, even if all long-term vacant properties were occupied, this would amount to approximately just one year’s worth of current housing delivery, falling way short of the 300,000 minimum additional dwellings a year required to satisfy demand.

Where these empty homes are is also important. Areas with high vacancies tend to have lower requirements for additional homes, and are already able to meet their housing need targets. For example, Barrow-in-Furness technically had a housing need of 0 in 2022, so there is unlikely to be the market capacity to absorb large numbers of currently vacant homes. The areas which need the greatest boost in supply also tend to be those which don’t have large numbers of vacant properties. Three Rivers was one of the worst performing local authorities in the 2022 Housing Delivery Test, meeting only 47 per cent of its housing need. However, with a long-term vacancy rate of only 0.6 per cent, bringing empty homes back into use is not going to be a complete solution to this shortfall.

The continued need for new build homes

Significant building of new homes is therefore still required in England. Many empty homes have already been brought back into use, especially the quick wins in areas that once had the highest vacancy rates but have since experienced economic growth. Simultaneously, areas with higher vacancy rates do not often have the same need for extra supply, whereas those with low rates are often failing to meet their demand for housing by a large margin.