This equates to nearly 290,000 empty private homes in England - based on data from the Department for Communities & Local Government (DCLG) and Halifax's own housing database.
Fourteen of the fifteen local authorities (LAs) with a high proportion of empty private homes are outside southern England and nine in the North West.
The biggest proportions of private empty homes are in Pendle (6.2 per cent), Manchester (5.7 per cent) and Liverpool (5.0 per cent). Significantly, there was a rise in the number of private empty homes in 12 of these 15 LAs during the past three years, with a combined rise of 10,260 empty homes in these areas.
The average house price in all 15 of the LAs with a high level of empty homes is below the regional average. The discount is, on average, £30,004 (or 17 per cent). The largest discount is in Stoke-on-Trent, at £63,145 (34 per cent).
Twelve of the 15 LAs with a high level of empty private homes rank amongst the 20 most deprived areas in England, according to the government's Indices of Deprivation.
Average earnings are below the regional average in all 15 LAs with a high level of empty private homes. Average weekly earnings in areas with a high amount of private empty homes are, on average, 10 per cent below the regional average and 17 per cent below the English average.
Nine of the 15 LAs with a high level of empty private homes have an unemployment rate at, or above, the regional average. On average, high empty home areas had a claimant count rate 0.3 percentage points above the regional average. The worst performer in the group – Liverpool - had an unemployment rate of 5.1 per cent, more than double the regional average of 2.5 per cent.
There was a 19,675 fall in the number of empty homes between April 2003 and April 2006, reducing the total from 308,438 in April 2003.
There was also a fall in the number of areas with a high level of empty homes with the number of LAs where at least 3 per cent of private properties are empty dropping from 40 in 2003 to 15 in 2006.
On top of the private figures, 12 LAs have more than 5 per cent of their public dwelling stock vacant. Nine are in the north of England with the highest proportions in Tyndale (7.9 per cent), Hartlepool (6.7 per cent) and North Norfolk (6.5 per cent).
Restoring attracts VAT
The cost of restoring an empty home attracts the full rate of VAT (17.5 per cent) unless the property has been vacant for more than two years when a reduced rate of 5 per cent applies.
A property vacant more than 10 years, which is renovated and sold, attracts a zero rate of VAT. New build properties, by contrast, are not liable for VAT on construction costs.
Halifax estimates that the average cost of restoring an empty home is £29,824 and involves significant repair to many aspects of a house including plumbing, kitchen, windows, roof and wiring.
On this basis, the average VAT payment for restoring an empty home vacant for less than two years would be £5,219. This is three and half time more than the VAT for restoring an empty home vacant for more than 2 years, which would attract an average VAT payment of £1,491.
Halifax calls on the government to extend the reduced 5 per cent rate of VAT for restoring an empty home to all properties vacant for more than 6 months, not just properties vacant for more than 2 years. This will provide a more level playing field between individuals and local authorities. Typically, local authorities do not pay VAT on renovation activities.
The lender believes that there should be a unified approach to council tax reductions for empty homes
Martin Ellis, chief economist at Halifax, commented: "It is encouraging that the number of empty homes in England has fallen by nearly 20,000 over the past three years, but it is also notable that the problem has become worse in many areas with the highest number of empty homes. Rising property prices encourage the rejuvenation of empty homes in many parts of England. However, it is clear that intervention is necessary."
