Monday 22 January 2018

Legal wrangling leaves up to 15,000 houses lying empty as crisis deepens

Figures from the Central Statistics Office show almost 200,000 houses and apartments are empty across the country in total, which represents almost 10pc of housing stock. Stock Image
Figures from the Central Statistics Office show almost 200,000 houses and apartments are empty across the country in total, which represents almost 10pc of housing stock. Stock Image
Paul Melia

Paul Melia

Disputes involving banks and receivers are leaving as many as 15,000 homes lying vacant across the State, despite the chronic housing shortage which is fuelling rents and price hikes.

The Housing Agency says legal and financial disputes are resulting in thousands of units being left empty at a time when overall vacancy rates across the country are more than twice that expected in a 'normal' housing market.

Figures from the Central Statistics Office show almost 200,000 houses and apartments are empty across the country in total, which represents almost 10pc of housing stock. Of these, just over 48,000 are in the cities.

An analysis of housing demand by the agency says that 81,000 new homes are needed out to 2020, of which 44,000 are in the five main urban areas.

Read more: An extra 1,700 families need social housing amid rent rises and lack of units

But vacancy rates in Dublin, Cork, Galway, Waterford and Limerick suggest a large part of the demand could be met by utilising existing supply.

"While a degree of vacant stock is to be expected at a given point in time due to, among other things, transactions or refurbishments taking place, the vacancy rate is above what is expected in areas around major urban centres of high demand," the National Statement of Housing Supply and Demand 2016 and Outlook 2017-18 report says, adding that "vacant housing needs more attention".

It notes that in England, the vacancy rate is 2.5pc. Around 5pc is considered usual in a normally functioning property market.

Housing Agency chief executive John O'Connor said reasons why vacancy rates were so high included legal and financial disputes, homes lying empty because owners were in nursing homes and delays in probate. However, in many cases, homes were located in rural areas with little or no demand.

"In some cases, units were rented but they [the owners] are in debt to the bank or lender and they're trying to resolve it," he said. "In some cases, they leave it vacant rather than put the effort into renting them which can drag on. If there's a bank or receiver involved, they might vacate it in order to sell it because they think they might get more with vacant possession. In terms of the numbers involved, it's in the tens of thousands."

He said the agency believed up to 30,000 units were subject to legal or financial disputes between lenders or receivers and owners, of which up to half could be vacant.

The Government expects to produce a strategy for tackling high vacancy rates later this year. Mr O'Connor said that in England, where populations are concentrated in urban areas and where there has been an under-supply of housing over a number of years, local authorities conducted an annual count using data including property tax returns, and could increase the tax rate by up to 50pc to discourage vacancy.

Read more: Dismay as Nama apartment block - which could house up to 200 people - remains vacant

The National Statement of Housing Supply and Demand report says a sustainable housing system will be important to maintaining the country's competitiveness, and that while housing completions continue to rise - some 14,932 units were built last year, up 18pc - it is still below the levels needed to meet demand, particularly in urban areas where affordability is a problem.

"International and domestic analysis indicates an affordability problem in particular parts of the country including Dublin, urban areas and the east of the country," it says, adding that people renting their homes tended to pay a higher proportion of their income on accommodation.

It notes that residential sales fell in 2016 for the first time in four years as house prices continued to increase, and that rents reached "record levels" in Dublin last year.

The report sets out the number of homes needed out to 2020 to meet demand. Dublin and its suburbs need "a minimum" of 33,109, or 6,622 a year.

Ten towns outside the major cities need at least 800, and more than 30 towns require 300. Galway city needs 2,316; some 8,434 are needed in Cork city, 3,436 in Limerick city and 713 in Waterford city.

It notes that this is based on projections of population growth, and does not consider 'pent-up demand'. By 2024, 30,000 will be needed every year - almost double current output.

Irish Independent

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