Vacant Homes: Problem or Opportunity?

With the slow delivery of new housing to the marketplace, both home-buyers and investors are turning their attention to vacant homes.

According to the website VacantHomes.ie, 54% of all vacant properties in the State are in the province of Leinster, with 29% in Munster, 14% in Connacht and the remaining 3% in Ulster. This aim of this website is to raise awareness of vacant homes and relies heavily on the general public to provide the information. We definitely recommend logging on.

We know that the Government is actively trying to tackle this nationwide problem. Part of the solution so far has been to review the Repair and Leasing Scheme, which was introduced back in 2016 but not used to any great effect. The key changes to the scheme, which took effect on the 1st February 2018, involved a decrease in the minimum lease term required from 10 down to 5 years. This change to the scheme will appeal to property owners who might have been discouraged by the minimum lease term of 10 years. The rent payment available to property owners has increased to 92% of market rent. It is worth pointing out that the advance funding for upgrading works is up to €40,000 and the budget for this initiative is quite substantial, €32 million is being made available in 2018, with the expectation of bringing 800 empty homes back into use this year. Furthermore, the scheme delivers upfront funding for any works necessary to bring the property up to the required standard, in return, the property owner agrees to lease the dwelling to the local authority to be used as social housing. The cost of the repairs is repaid by the property owner by offsetting it against the rent. Under the direct lease, the local authority will manage the upgrading works and then manage the property, effectively assuming the role of landlord. Additional funding is available where the property is a former bedsit, from €40,000 to €50,000. There is no change to the requirement that a property must be vacant for a period of 12 months or more to be accepted into the scheme.

The Opportunity in Numbers

According to the latest figures from the Department of Housing, the quantity of unoccupied homes in parts of Dublin has been exaggerated by more than 30 times the genuine total. In 2017 the CSO identified about 30,000 vacant homes across the capital’s four local authority areas, however, figures from the Department indicate the correct number is likely to be between 900 and 1,000 – but, who knows? Certainly, vacant homes could potentially boost the property market and deliver housing faster than new housing developments, but only if the home owners can be identified and contacted.

Ian Lawlor
086 3625482

Director / Business Development
Lotus Investment Group