Are London’s empty homes fuelling the capital’s housing crisis?

The housing crisis is continually hitting headlines up and down the country.

With the focus generally on London and the South East, the shortage of housing is leading to rapidly rising prices – leaving many with almost no opportunity for getting on the housing ladder.

To put this into context, in some of the capital’s most expensive boroughs, house prices can be as much as 17 times the average London salary.

However, mortgage lenders are generally reluctant to lend more than five times a person’s wage, so having a hefty deposit is essential.

For those without savings or the “bank of mum and dad” to fall back on, this can be an insurmountable problem.

The property market is very much one of supply and demand and it is this shortage of suitable and affordable property that is seemingly causing the issue.

While the obvious solution would be to build more homes, the tendency over recent years, in London at least, has been for property companies to concentrate on building luxury developments beyond the pockets of ordinary working people.

But, there may already be a way to alleviate at least some of the pressure on the market and, hopefully, start to bring down house prices too.

Figures released by the charity Empty Homes suggest that there are around 57,000 empty properties in the London area – many of which have been bought purely as investments.

In some cases the so-called “buy-to-leave” landlords snap up a property and leave it unoccupied so they don’t have the potential hassle of tenants and can simply sell it on at a profit.

The rapidly rising property costs in London mean that very soon they can be seeing a great return on their investment.

Of course there are also many other reasons why these properties may be standing empty.

For example, the owners may be living abroad and want to keep a base in the UK, or the properties could have been inherited from others and not yet sold.

Although, one thing these empty properties will have in common is an increased risk of damage when they’re left unoccupied – whether from vandalism, burst pipes in the winter or even squatters.

The problem is so prolific for empty homes, that companies provide specific insurance for empty homes to cover all eventualities.

Without it, issues can well escalate making a property even harder to sell as time goes by.

There may be a glimmer of hope for potential first time home buyers in London (though quite a large concern for anyone waiting .

Some projections have said that 2017 could be the year when the bubble bursts and house prices start to fall as demand reduces.

So this, as well as the uncertain effects of Brexit, means that before long there may well be a return to the days when living affordably in the capital was a real possibility for many, though as always, a degree of uncertainty remains.

Featured image courtesy of Alejandro Escario Méndez, with thanks

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