If I told you that in every town we have dozens of properties that could become homes and would take only a few months to deliver, you’d probably think about empty shops.
Well, it is true there are about 12,000 units that are empty, according to the Local Data Company. And although many of these will return to retailing, some will not and are ripe for conversion to homes. I think we need to be radical in reshaping our town centres towards new uses such as leisure, hospitality, entertainment and more homes.
However, it wasn’t empty shops I had in mind.
Walk along your local high street and look up. Look through the windows of the upper floors of the local shops and restaurants. They are often empty, yet they don’t appear in any statistics. That is because the building is let as a whole.
Yet many of those upper floors would convert easily into homes, in just a few months.
Indeed, as housing minister, I asked for an estimate of how many properties this might include. The best estimate was between 350,000 and 450,000.
Now many of these would not be suitable for conversion, but even if only one-third were physically capable of conversion, that is the equivalent of last year’s entire housebuilding output.
Converting these “uppers” into homes offers real benefits. They are centrally located, and attractive for young people. Existing planning rules permit such conversions in most cases. The cost per home would be significantly lower than building new and would take just a few months. In struggling town centres, the new residents would create more footfall and so help the local economy.
So why is it not happening? I have been asking this of almost every local planner and property owner I meet. The answers are quite basic.
First, there is no reason for landlords to act while the existing FRI terms apply to the whole building. The 1954 Landlord and Tenant Act needs to be changed to allow tenants to only relet the ground floor. That is the stick.
Then come the carrots. First, targeted VAT relief is needed to help reduce the costs of conversion, as many small landlords do not have the cash. A 5% rate on designated conversions would make a real difference for some.
Equally, as these properties are often someone’s pension equivalent, there needs to be a recognition in the tax system. Some have argued for a change to SIPP rules so that these conversions to residential could be included.
Lastly, the local council or housing association should offer to be the managing agent for such conversions, removing the hassle that most small landlords dread.
Together, these changes would nudge many of these properties into becoming much-needed homes, at a much lower cost than building a new dwelling. Alongside the wider agenda of renewing our town centres, these small policy changes could deliver more homes and at rents that people could afford.
Mark Prisk is an MP, chartered surveyor and former housing minister
