1,644 Cheltenham Properties lie empty - An injustice for the 2,713 people on the Cheltenham Council House Waiting List?

Easy problems should have easy solutions  - shouldn’t they?

Problems like Cheltenham’s housing crisis, where we have a rudimentary numerical problem of too few homes for too many people ... the answer is clearly to build more property in Cheltenham - but that, unfortunately for those desperately seeking to purchase or let a property, takes a lot of time and huge amounts of money. So what of other solutions?

The most recent set of figures from 2015 state there are 1,644 empty homes in the Cheltenham Borough Council area. So it begs the question ... why not put them back onto the system and help ease the Cheltenham housing crisis? Whilst they stand empty 2,713 Cheltenham households (not people – households) are on the Council House Waiting List for council houses. Surely, we can undoubtedly all agree that property left empty for years and years isn’t morally right with the burgeoning Council House Waiting List, not to also mention the issue of homelessness.

But a different story emerges when you look deeper into the numbers. Of those 1,644 homes lying empty, only 388 properties were empty for more than six months. The local authority has to report a property being empty, even if its for a week. So many of the Cheltenham properties are either awaiting new homeowners or, in the case of rental properties, new tenants. Also most certainly, some properties are being refurbished and renovated, while others properties have homeowners who are anxious to sell but cannot find a buyer.

And this is where its gets even more interesting. Of the 388 long-term vacant properties (those empty more than six months), 37 belong to the council. However, before we all go Council-bashing, anecdotal evidence suggests these empty council houses are habitually in need of so much restoration that it’s not worth the Council’s while to do and are in the roughest parts of the council estates, they are properties that even the Council find difficult to fill.

The fact is that the number of genuinely long term empty properties is only a tiny drop in the ocean of the 50,929 properties in the area covered by Cheltenham Borough Council and, even if every one of those empty homes were filled with tenants tomorrow, it would only meet a small fraction of Cheltenham housing needs.

So what does this mean for all the homeowners and landlords of Cheltenham? Well it means with demand being so high, especially for rental properties, the certainty of the rental market growing is an inevitability because young people cannot buy and councils don’t have the money to build new council houses. 

£4,400 boost to Gloucester First time buyers

There’s a whole legion of wannabe Gloucester first-time buyers keen to get on the property ladder and they now have a 3% price advantage over the previously quicker responding army of Gloucester landlords with cash at the ready. Since the start of April, buy to let landlords have had to pay an additional 3% stamp duty so whilst demand from some Gloucester buy to let landlords has dropped away, in the interim, it offers Gloucester first time buyers  a chance to fill the vacuum with less competition from cash rich landlords (over two thirds of BTL properties were purchased without a mortgage in the last 7 years) who could bid more and complete quicker.

Looking at the average value of a terraced house in Gloucester currently standing at £148,300, that means if our Gloucester FTB went up against a Gloucester landlord, the landlord would have to pay an additional £4,449 in stamp duty. Early anecdotal evidence from fellow property professionals in the city is suggesting landlords are reducing their offers slightly on Gloucester properties to reflect the extra stamp duty.

Whilst on the face of it, it appears landlords are being punished by No.11 Downing Street, I actually believe this increase in stamp duty for landlords is a good thing for the Gloucester property market as a whole.

Since 2011/12, the Gloucester property market has performed very well indeed. Over the last 12 months, £574,284,171 has been spent buying 2,829 Gloucester properties. Figures from the Land Registry have just been released and month on month in our council area, property values are 0.1% lower, yet 4.3% higher year on year. These figures are nowhere near the heady days of 2003 (February to be exact), when Gloucester property prices rose by 24.3% in 12 months.

So as property values in Gloucester (and the UK as whole) start to stabilize and come back to some kind of balance, I am beginning to see savvy landlords view the Gloucester property market in a different light. Even with the Spring rush, gone are the days where you could make limitless money on anything that had a door, a few windows and roof. This stamp duty change has made more and more landlords,  take advice on what or not to buy and what to pay, meaning Gloucester landlords are being more calculated with their Gloucester BTL purchases.

What effect Brexit may have remains to be seen, however there is still an acute housing shortage so probably over the medium/ long term , thinks will carry on as usual.