Void property can be an opportunity to unlock value

For some this is commercial property that is no longer used, sometimes as small as a disused public toilet, all the way up to vacant storage units or office buildings. It can also include empty homes that could be sold on, upgraded and used by an owner-occupier or new tenant.

With many of these types of void property, one thing is clear: the liability and cost of keeping the property means it is losing money. If a sale can be made then value can be better used elsewhere. For many housing associations and local authorities, this value would be better put into supporting their plans for new housebuilding and providing efficient, safe and comfortable homes fit for the future.

“With many of these types of void property, one thing is clear: the liability and cost of keeping the property means it is losing money. If a sale can be made then value can be better used elsewhere”

The property that is sold to fund this, particularly the void homes, could be fit for owner-occupiers or first-time buyers to support community stability, or for approved, reputable landlords to take them on where rental demand is high.

Smaller housing associations or providers that have a strategy focused on retrofitting and renovating properties in their portfolio may also be a suitable fit. They can keep such properties within the sector and available for social tenants.

Another route is people from the local community converting the land or property to enhance their own area. And this is an avenue that is used more than most would think.

Whichever the route, it is evident that there are options and opportunities for sale, but there are considerations.

Selling commercial and residential property in the private sector is under more scrutiny than ever due in part to the Renters’ Rights Act, and it is important to ensure property sold is used positively. This is where a portfolio-level strategy is an important part of the process.

Working through all of the void property to understand each site’s potential value, use and potential buyers is crucial to ensuring its sale is the correct decision in line with strategic objectives for the area in the long term. The question is, how can local authorities, housing associations and social housing providers go about doing this?

Previously seen as exclusively for unusual stock that proves difficult to sell, auctions are fast becoming a practical option for housing associations and social housing providers to manage void stock. Transparency, speed and security of sales at auctions have seen their popularity increase with property owners who want to unlock value from an asset quickly.

Auctions have also grown in popularity with buyers, particularly since online and livestream options multiplied during the pandemic and accelerated their rollout. The resulting increase in the pool of buyers has seen bidding competition rise and meant many sellers have been achieving market value, or above, for their property.

“Selling commercial and residential property in the private sector is under more scrutiny than ever due in part to the Renters’ Rights Act, and it is important to ensure property sold is used positively”

For housing associations and social housing providers, working on a portfolio-level sales strategy that leverages auctions as a precise and accountable tool for unlocking value in their void building stock, auctions can thus be an ideal option.

The larger pool of buyers also means that housing associations and local authorities can find the right buyers, be that owner-occupiers, accredited landlords or other housing associations, to access their lots or tailored auctions.

We have seen an increase in housing associations and social housing providers coming to us to solve the challenges of rationalising their portfolio, with many opting for selling high volumes of lots through auction. For instance, we have worked with a housing association to sell 100 properties since June as part of a portfolio-wide strategy. And there are more properties in the pipeline that are likely to be sold.

As pressure piles on housing associations and social housing providers to meet the growing demand for safe, comfortable, healthy and efficient homes, unlocking value from thousands of void properties could be a practical way to raise the funds needed.

However, what we are seeing is that this isn’t just about housing associations and social housing providers achieving value quickly. This is about them seeing an opportunity to continue building the community through local people and the assets it already owns by unlocking value from the right buyers.

Andy Thompson, director, Eddisons