Will the blight of empty homes in the UK affect Inheritance Tax advice


Article by Phil

The number of empty houses has increased by 3.6% to over 675,000 according to Leeds Building Society. But will this affect Inheritance Tax advice?

The government says that the economy needs to build another 300,000 house every year to keep pace with demand. So having twice that number unoccupied seems to be a waste of resources. Of the empty homes, almost 250,000 have been unoccupied long term, which means longer than six months. Reasons include Inheritance Tax advice delays, disrepair and of course families holding out for higher prices.

The situation is not as bad however than it has been in the past. At its peak back in 2008 there were nearly 750,000 empty homes. Many of these were second homes. The Leeds Building Society now has a policy of not lending against second homes as a matter of principal.

Surprisingly the highest number of empty home is not in London, but in the North West. Closely followed by the Southeast.

Affordability for home buyers continues to be a problem. The average UK house now costs just over 9 times the average salary. Back in 1997 that multiple was only three times the average salary.

There are also almost 200,000 people who are stuck on high mortgage rates which they can’t change. So called “mortgage prisoners”. (These are customers of closed banks like Northern Rock who were moved to the publicly funded UK Asset Retention (UKAR) after the financial crisis. Unfortunately for these customers their mortgage rates are at standard rates and other lenders won’t take on their mortgages because they are interest only or they are in negative equity for example.)

The London School of Economics (LSE) has proposed that the government should help to bail out these customers. By offering Help to Buy style deals, or by paying for financial advice. They estimate this would cost the government £2.6 billion.

The government disputes the figures, arguing that there are less than 50,000 customers trapped in this kind of mortgage arrangement. They also say that they shouldn’t have to pay and that customers should be able to access new deals through the open market. The FCA says it has already relaxed the lending rules for these customers. But it seems like no one wants to help.

It must be very frustrating being trapped in a mortgage that you can’t escape from.


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