Councils Gain Power to Seize Long-Term Empty Homes Under Labour Plans

Councils are set to gain new powers to seize buy-to-let properties that have been empty for as little as six months, under plans unveiled by Labour housing secretary Angela Rayner. The proposed changes would significantly reduce the current two-year threshold for local authorities to issue an Empty Dwelling Management Order (EDMO), a mechanism that allows councils to take possession and control of vacant properties to let them out.

The announcement has raised concerns among some landlords who fear their properties could be commandeered if a tenant vacates and they struggle to find a new one, or if a property remains unsold on the market.

According to government estimates, there are nearly 600,000 privately owned properties in England that are currently empty, with approximately half of these having been vacant for more than six months. While specific figures on the number of EDMOs successfully issued are not publicly released, anecdotal evidence suggests they have been historically low. Lowering the vacancy period to six months could increase the number of properties subject to such orders.

An EDMO grants a council the right to manage a property without affecting the owner's long-term rights. The primary goal of these orders is to bring empty properties back into use and prevent them from falling into disrepair. There are two types of EDMOs: an interim EDMO, lasting up to 12 months, during which councils attempt to work with owners to find a solution, and a final EDMO, which can extend up to seven years if no agreement is reached. Under a final EDMO, the owner's decision-making power regarding the property's use is diminished.

Councils typically identify empty properties through council tax records and by dedicated empty homes officers. Before issuing an EDMO, they must notify the owner and inquire about any plans to bring the property back into use. Owners are not obligated to discuss their plans but doing so may influence the council's decision.

Specific exemptions are in place to prevent the arbitrary seizure of homes. Properties that are a person's main residence but are temporarily vacant, second homes, or holiday homes are not eligible. If an owner can demonstrate active plans to bring a property back into use in the near future, an EDMO cannot be approved. Properties currently being sold or let are also exempt, though councils may investigate if the sale or letting appears disingenuous. Homes undergoing probate or where probate has been granted within the previous six months are also protected.

To implement an EDMO, councils must first obtain approval from an independent property tribunal. The orders cannot be applied to properties used for non-residential purposes.

While a council manages a property under an EDMO, tenants will be responsible for utility bills. The council is required to insure the property against damage, but the owner remains liable for council tax when the property is empty. This liability typically transfers to a tenant once the property is occupied. Currently, owners of empty homes often pay double council tax, which can increase to triple or quadruple for properties empty for longer periods.

Owners can seek to end an EDMO early if they intend to occupy or sell the property. They also have the right to appeal to the tribunal regarding council actions. If an owner agrees to lease the property to the council or implement other measures to bring it back into use, the council may consider ending the order.

Bringing neglected properties back into habitable condition may incur costs for the council, which are intended to be recouped through rental income. The council may also forgo revenue from council tax on empty homes. At the conclusion of an EDMO, the owner may reclaim a property that has been improved without personal expense. If rental income does not cover the council's costs, the owner is generally not liable for the shortfall unless they agree to it as a condition for early termination of the order. Some councils might opt to continue receiving council tax revenue rather than pursuing EDMOs.

Properties with mortgages can still be subject to EDMOs. Ownership remains with the borrower, and mortgage payments are their responsibility. Rental income generated under an EDMO can be used to cover management costs, but the borrower must continue to pay their mortgage. Mortgage brokers advise property owners expecting a home to be vacant for an extended period to check their mortgage conditions and insurance requirements early and to inform their lender and insurer as needed. Appropriate unoccupied property cover should be in place, as mortgage and insurance obligations can arise sooner than the six-month threshold for EDMOs.

Special provisions apply to properties left empty after an owner's death. An EDMO cannot be issued for at least six months after a grant of representation is obtained from the Probate Registry. The property may remain exempt if the new owner has plans to sell, let, or occupy it. Government guidance suggests that councils are unlikely to use enforcement powers for properties affected by recent bereavement if there are plans for their future use.