Loans to bring empty homes back into use

Housing hit list

Liverpool is taking steps forward in tackling the number of empty homes in the city, by signing-up to an innovative new pilot scheme.

The National Empty Homes Loan Fund (NEHLF) is launched today, aimed at bringing some of England’s 710,000 empty homes back into use.

Liverpool is one of 39 local authorities selected to be part of the pilot, which will help breathe new life into some of the city’s 7,500 long-term vacant properties, providing much-needed homes for the city.

The scheme is led by the charity Empty Homes, in partnership with central government and the Ecology Building Society. Liverpool’s involvement in the scheme means owners of empty homes in the city will be able to apply for loans of up to £15,000 to help bring their properties back into affordable use.

Currently, owners of empty homes are often unable to access funds to bring them back into use, creating a vicious cycle of decline in areas with high numbers of empty properties.

NEHLF will provide access to secured loans at a fixed 5% interest rate, and will enable owners to renovate the property to Decent Homes standard (see Editors’ notes).

Mayor of Liverpool, Joe Anderson, said: “We are absolutely determined to bring empty properties across the city back into use and provide valuable homes for our residents. Properties left vacant blight our neighbourhoods and are a wasted resource.

“We know that many of our empty properties exist because owners simply do not have the money that is required to bring them back up to a habitable standard. We’re already making good progress in tackling this issue through our Housing Delivery Plan and Empty Homes Programme – and this new initiative will support the work we are doing.”

The scheme has been funded by a grant of £3 million from central government and is being administered by Ecology Building Society, a specialist mortgage lender that supports sustainable communities. It should provide funding for hundreds of properties and is available to individuals aged 18 and over who own a property that has been empty for six months or more.

David Ireland OBE, Chief Executive of Empty Homes, said: “This scheme is a real first in England and is a great example of central government working together with the public and private sector to try and reduce the number of empty homes in the UK.

“We hope the fund will enable hundreds of empty homes to be brought back up to standard and back into the housing stock.”

Paul Ellis, Chief Executive of Ecology Building Society, said: “We exist to support projects that will benefit the environment and local communities, so it’s natural for us to want to support efforts to bring empty homes back into use. This can affect any street in any town. At a time when there is increasing demand for homes but an acute lack of supply it makes sense to bring new life to existing but neglected properties, and we want to help provide the incentive for people to take on an empty home.”

Individuals can either apply for the loan through their participating local authority (see Editors’ notes) or if their local authority is not yet a member of the scheme, directly through Ecology Building Society. Normal identification checks and affordability criteria will apply.

Liverpool’s success in being selected for the pilot will build on the huge amount of work going on in the city to tackle empty homes. Liverpool’s Empty Homes programme – which supports the Mayor of Liverpool’s pledge to deliver 5,000 new and refurbished homes for the city by 2016 – is introducing a range of other measures, which are starting to make a real impact.

The council’s housing team has drawn up a ‘hit-list’ of the top 1,000 empty homes in the city, and is now taking firm action. Owners are being encouraged to bring their properties back into use as quickly as possible, and are being informed that enforcement action will be taken, where appropriate.

Liverpool has also achieved significant success in securing £14 million in Government ‘Clusters of Empty Homes Funding’, which is being used to revitalise hundreds of properties.

And an innovative pilot scheme to sell 20 empty properties to local people for just £1 each is underway. More than 1,000 people applied for the ‘Homes for a Pound’ scheme, which aims to breathe new life into vacant properties in Granby and Picton. Successful applicants are due to be announced in the near future.

Full details of the National Empty Homes Loan Fund can be found at www.emptyhomes.com and www.ecology.co.uk/emptyhomes

 

Frequently asked questions

Am I eligible?
To be eligible for an NEHLF loan you must:
• be the owner of an empty property that has been empty for six months or more
• be over 18 years of age
• not have secured borrowing of more than 70% of the property’s value in total (including the NEHLF loan)
• have the ability to repay the loan.

How much can I borrow?
You can borrow any amount between £5,000 and £15,000. If you have an existing mortgage, the Ecology Building Society will take the second charge.

What is the interest rate?
The interest rate is fixed at 5%.

How long can I take the loan out for?
The loan is for a maximum of 5 years. If you decide to pay the loan off before the end of the 5 year period, there are early repayment fees of 6% of the redemption balance.

Is there a timescale for completing the work?
The estimated timescale for the completion of the main works will be jointly agreed and identified in the loan contract. The choice of who actually undertakes the works is the property owner’s decision but the works will need to deliver the property to Decent Homes standard and again that will be agreed in the contract.

What type of repair work can be done?
There is no fixed list of permitted works. The most common works are likely to include non-uPVC double glazed windows/doors, roofing work, kitchens, bathrooms, re-wiring, plumbing and insulation work.

Can I sell the property once the work is completed?
The intention is that the empty property must be let once it has been refurbished to Decent Homes standard. It must be let at an affordable rent level that will have been agreed at the time of the application. If you do sell the property within the agreed 5 year loan period, then the loan must be repaid and you will face an early redemption penalty.

What does Decent Homes standard mean?
This is a government standard which means that the home is in good repair, has reasonably modern facilities and is warm and weatherproof.