In May this year, property portal Zoopla published an article with the headline “Why half of UK homes fail to sell…”Their first key takeaway stated that 44% of UK homes listed for sale over the past three years failed to sell. It was a bold statement and highlighted the challenges facing today’s UK property market, rather than putting a positive spin on difficult market conditions.
🔗 Zoopla Article | Why Half Of UK Homes Fail To Sell
Over the coming weeks this Zoopla article was the basis for several other articles, with The Telegraph on the 30th June stating that “60% of homes listed in January are still on the market”, and then on the 13th July, Property Wire published an article headed “Overpricing leaves 44% of UK homes unsold in three years” In that article, a London based estate Agent, Josh Endacott, asserted that many asking prices are set based on 2021 and 2022 values, when buyer demand peaked during the pandemic housing boom, yet the market has since shifted significantly. He goes on to say, “The first four weeks of any listing are absolutely critical. It’s when buyer interest is at its highest and when the most serious purchasers are actively comparing properties…… If your price is out of step with the market during that window, you lose those buyers, and you are unlikely to get them back.” Indeed, good advice.
🔗 Property Wire Article | Overpricing Leaves 44% Of UK Homes Unsold In Three Years
For most owners, whilst taking a long time to sell is very frustrating, the immediate financial implications are not too serious, with agents bearing the marketing costs, often it is losing their intended purchase that can be most upsetting for those who can’t attract a buyer.
However, that all changes for an empty property or vacant home that remains unoccupied for a long period, as several holding costs are easy to overlook but can really add up over time.
- Insurance Costs for Empty Properties – Standard building insurance policies usually invalidate claims if a building is left empty for more than 30–60 consecutive days. Yet, it is imperative to have cover which protects empty commercial or residential buildings against fire, storm, flood, vandalism, theft, and property owners’ liability. Insurers will base premiums on circumstances, and their questions must be answered as accurately as possible. If anything changes, it’s important to let them know, as otherwise the policy could become invalid. The insurer can refuse to pay out if a claim is made.
- Council Tax on Empty Homes – Local authorities differ in the rules they apply. For instance, Buckinghamshire Council offer an exemption for up to 12 months for empty properties that need major repairs, whereas Central Beds does not. Both of these local authorities charge their normal rate for up to a year, i.e. the bill stays the same, but after that the bills escalate sharply, charging normal rate plus a 100% premium, doubling the bill, then at 5 years there is a 200% premium added so the bill is triple, and at 10 years it is quadrupled!
- Utility Bills for Vacant Properties – Even though there may be nobody living in the property, standing charges will still apply to maintain existing active supplies for water, gas and electricity. The temptation is to disconnect; however, that too carries costs, both for disconnection and reconnection. You or your buyer will also need to be added to a waiting list to be reconnected.
- Security Risks of Empty Buildings – Depending on the property and the area, the fear of a property being empty can be far worse than the actual risk; that said, statistically, empty homes are more vulnerable to burglary, vandalism, and even squatting. Without regular activity, they can attract unwanted attention; it becomes easy for opportunistic intruders to identify a property as unoccupied and the longer a property remains vacant, the greater the chance of issues like theft, vandalism, and even maintenance issues like water leaks going unnoticed.
- Property Deterioration While Vacant – Apart from fire, water usually causes the most significant damage, rotting wood and rusting metal. Sometimes this is simply due to the weather, leading to problems such as damp, mould, wood-boring insects, and fungi. Wood, brick, and stone are the three most common building materials, and each reacts differently to weathering and humidity. Inadequate ventilation in buildings, their roof spaces, or even blocked air bricks and chimneys will increase the moisture content of the air, increasing the risk of condensation and mould growth. Dampness is less likely to dry out when ventilation is inadequate, and wood-boring insects and fungi can quickly cause damage. Alterations made using modern impermeable materials can also cause decay, such as an earlier repair or alteration using cement mortars, which may cause damage by trapping moisture.
Typically, for both commercial and residential estate agents, the property market slows on the approach to the Christmas holidays, seeing activity levels fall away once into November. Fortunately, most empty properties, particularly those requiring improvement, are ideal candidates for auction, and our October and December success rates are consistently among our highest. Indeed, last year we sold 85% of lots offered in October and 89% in December. So, if you are trying to sell an empty property, you may be mindful that there will be a short window for your agent between their buyers returning from holiday in September, and their slowdown in November. Missing that window may leave you enduring another winter with the aforementioned problems, hoping for renewed market activity in the New Year. A sale agreed then will still need solicitors to progress to an exchange of contracts, and that will probably take months. Rather than face that prospect, entering our property auction will see you with an extremely high percentage of success, an exchange of contracts on the fall of the gavel, and completion just 4 weeks later.
If you’re worried about the ongoing costs of owning an empty property, our experienced team at R&H Auctions is here to help. Get in touch today for a free, no-obligation auction appraisal and discover how quickly our property auction could help you achieve a secure sale, with exchange of contracts on the fall of the gavel and completion just four weeks later.
📞 01280 818 907
