Do Wales’ empty properties hold key to solving housing crisis?
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BRINGING empty homes back into use should be the mainstay of attempts to ease the housing crisis in Wales, MPS heard.
Almost six times more properties in the country are classed as empty than there are second homes, the Welsh Affairs Committee was told.
The House of Commons committee has launched an inquiry into the impact of population change in Wales.
This week it examined how net migration is affecting housing stocks and the Welsh language and what can be done to provide desperately needed homes.
Office for National Statistics (ONS) figures for 2021 revealed the population in Wales was at a record high, having grown 1.4% in the previous decade.
By June 2022, Welsh Government data showed a further 0.8% rise, driven mainly by an increase in “net international migration”.
Yet long-term population growth has slowed and Wales now has a larger proportion of older people than elsewhere in the UK.
The number of people of working age is also falling - down 2.5% between 2011-21.
And while some areas are booming, like Newport, Cardiff and Bridgend, populations are falling in such as Welsh-speaking heartlands such as Ceredigion and Gwynedd.
The Covid pandemic brought further inward migration and a growth in second homes, especially in coastal areas.
But following changes allowing much higher council tax on second homes, Welsh Government figures released last week show a projected 9.3% fall in second homes in Wales compared to 2023-24 - equivalent to 2,240 properties released back onto the market.
Across Wales, however, ONS figures show empty homes far outweigh second homes.
Of the 120,450 unoccupied dwellings in Wales in 2021, some 85.4% were truly vacant (confirmed by visits and utility records) and 14.6% were second homes.
As a whole, Wales has more vacant properties (7%) compared with England (5.4%).
As a proportion of total housing stocks, the country also has twice as many second homes (1.2%) than in England (0.6%).
Committee member Ynys Môn MP Virginia Crosbie questioned whether bringing empty homes back into use should be the priority. “There’s a lot of talk, quite rightly, about second homes but it does seem that the low-hanging fruit should actually be empty dwellings,” she said.
Ifan Glyn, Wales director of the Federation of Master Builders (FMB), told the inquiry it wasn’t so simple, saying there was “no silver bullet” for tackling empty homes.
“Often the reason why these homes are empty is because people don’t want to live in them, and there are areas where it’s not particularly appealing to live in,” he said.
“The cost of bringing some of those home back to life is very prohibitive and not at all appealing to the owners of those properties.
“They can’t shift them. It’s a very complex and challenging problem.”
Mark Harris, Wales planning and policy adviser at the Home Builders Federation, agreed.
He added: “It is going to get more complex to bring these empty homes back into use because of the higher standards we are requiring our homes to be built to. It’s much easier to build a new home to modern, carbon neutral standards, than trying to retrofit older homes.”
Low occupancy in larger properties is a Waleswide issue, suggested Ifan Glyn.
He said: “One of the interesting things in the 2021 census was that the majority of homes in Wales are too big. We have the opposite problem to what we had 100-200 years ago.”
He said it was not just house numbers but also house type that is causing gridlock in the housing sector.
“The problem is that in certain rural villages, people are blocked from being able to move,” he said.
“People living in larger family homes - the children have left, they’ve retired - they want to downsize and stay in the same village but they can’t because the options are not there.
“One problem is, our national approach to housing is focused on previous trends - it locks us into a presumption that future trends will be the same.
“It lacks ambition. There needs to be more flexibility in those sort of (rural) places so that SME developers can build the right type of properties that are required for those communities to flourish again.”
To tackle shortfalls, Wales is targeting 7,400 new-build homes each year. Yet the number being delivered is around 5,500 new per year.
The resulting lack of availability is squeezing potential buyers and having a dramatic effect on the market, said Ifan Glyn.
“The ability to buy a home is out of reach for a lot of people,” he said. “They’re then driven to renting, and rents have gone up just over 7%, so that’s then out of reach for lot of people.
“The average price for renting a property for a household in Wales is about £1,000 and for those on a low income that’s a big problem. They are then driven to social housing and waiting lists are bigger than they’ve ever been, so it’s a massive problem.”
National house builders tend to target urban areas in South Wales and northeast Wales.
Demand for new homes is often highest in these places and existing infrastructure, such as roads, business parks and schools, is more developed.
Builders say land availability can be an issue but the biggest obstacle is the planning system - they told the inquiry it was too complex and council planning departments were often underresourced.
Another impact has been tighter planning guidance from Natural Resources Wales (NRW). This has blocked developments that may affect phosphorus-sensitive rivers in Special Areas of Conservation (SAC).
In Ceredigion, where the Teifi catchment is partly affected, this is a “massive” issue, said Barry Rees, Ceredigion Council’s corporate director. “There is very limited development there,” he said.
“And if as has been suggested we have Marine SACS as well, you will have 30% of Ceredigion where effectively we won’t be able to build the houses we need.”
Ceredigion has no social housing and works with SMES (Small and medium-sized enterprises) to build smaller developments. Ifan Glyn said this was once a model common in more rural areas of Wales but was becoming less so.
“We’ve seen is a massive decline in the number and output of SME house builders,” he said.
“Back in the late 80s, roughly 40% of new homes were built by SMES, today that figure is down to around 10%.
“The main reason for this decline is the increase in complexity, cost and risk involved with the planning process.
“Planning has become increasingly difficult to navigate and only those companies with massive resources and deep pockets can deal with it.”
Another issue is access to skilled labour. In a recent survey of FMB members, 40% were struggling to hire carpenters, 35% with bricklayers and 35% with general labourers.
“Overall, 50% reported delays to jobs because of lack of skilled labour - a UK picture mirrored in Wales.
Mrs Crosbie believes that Wales must grow its way out of its housing crisis by stimulating local economies to provide better paid jobs and “change the dependency ratio”.
She cited all-wales figures showing there are 54 dependent people for every 100 people of working age.
On Anglesey, the ratio is 77 dependents per 100 workers, putting pressure on communities and council budgets. “On
Anglesey, the average salary is £27,000 and yet the average home costs £250,000,” she added.
Ceredigion’s Barry Rees agreed, saying economic growth was the “golden ticket” in a county where house prices were the fourth highest in Wales.
“Developing the economy is the number one goal in our corporate strategy,” he said.
As well as examining the reasons for population changes in Wales, and their impacts, the Welsh Affairs Committee will look at the mitigations that could be put in place by the UK Government.