Housing statistics quarterly update: December 2020

3. Long-Term Empty Properties and Second Homes

Councils classify some properties in their area as long-term empty, unoccupied, or second homes for the purposes of calculating council tax liabilities. These statuses impact on the council tax through exemptions for unoccupied properties, discounts for second homes and some long term empty properties, or a levy for some long term empty properties. As a result information on the numbers of such properties is sourced from council tax statistics. It is collected annually from local authorities and is available for:

• Unoccupied Exemptions: generally properties which are empty and unfurnished for less than 6 months and exempt from paying council tax.^[3]
• Long Term Empty Properties: properties which have been empty for more than 6 months and are liable for council tax.
• Second Homes: homes which are furnished and lived in for at least 25 days in a 12 month period but not as someone's main residence.

Trends over time within each of these categories should be interpreted with some caution, given that increases and decreases can be caused in part by reclassification exercises which local authorities carry out from time to time, or issues with management information systems, rather than being real changes in the numbers of properties.

Empty properties are of particular interest as they can help increase the supply of occupied housing in Scotland when brought back into use.

There are several factors that can impact on the number of long term empty properties and second homes that are counted through the council tax statistics including changes to council tax liability policy and management information systems.

Regarding policy changes, from 1st April 2013, local authorities gained the discretionary power to remove the council tax discount associated with long term empty properties or to set a council tax increase of up to 100% on certain properties which have been empty for 12 months or more. Prior to April 2017, second homes were entitled to a council tax discount of between 10% and 50%, and as of April 2017, local authorities were also given the option to remove the council tax discount on second homes. For 2020-21, 25 out of the 32 local authorities have removed the council tax discount on second homes, 6 will retain the 10% discount and in one local authority from 1 October 2019 a second home discount of 10% will only apply for a period of 12 months from the date the property was last occupied as a sole or main residence, following the 12 month period the discount will be removed.

Management information systems can also have an impact on how properties are recorded. In addition, there have also been some improvements in the data held by some local authorities leading to the reclassification of a number of properties between the long term empty and second home categories. These changes should be kept in mind when comparing the numbers in recent years.

In addition, there may have been some impact of the COVID-19 lockdown restrictions on the levels of empty homes due to COVID-lockdown restrictions between mid-March and late June 2020.

The latest figures, for September 2020, show that there were 24,466 second homes, 44,143 unoccupied exemptions which have generally been empty and unfurnished for less than 6 months, and 47,333 long term empty properties that had been empty for more than 6 months. Of those that had been empty for more than 6 months, just under two-thirds (30,551 or 65%) had been empty for over 12 months, and of those 19,386 had a council tax discount below 10% or a council tax increase applied under the new powers described above.

Chart 7 above shows that, since 2005, the number of long term empty properties has generally been on the rise, having more than doubled over this period. Some some of the rises in 2013 to 2015 will be due to the reclassification of some properties in the light of the new powers described above. There has been a slight decrease between 2008 and 2009 2015 and 2016, but an increase since then until 2019. In the latest year to September 2020, the number of long term empty properties has increased by 16% (6,370 properties) to 47,333.

Increases in the numbers of empty properties in the latest year are likely to be associated with the COVID 19 pandemic, which has directly affected both the property rental and sales markets, with the movement restrictions in place also having a range of other impacts.

The number of second homes has remained more stable over the time series, with increases seen for 35,036 second homes in 2008 to 40,599 in 2012. This was followed by reductions in the number of second homes in 2013 to 2016 to 26,140 which are also likely to be at least partly due to reclassification. In the latest year, the number of second homes (24,466) is at a broadly similar level to the previous year 2019 (24,314 homes), having increased slightly by only 1% (152 dwellings).

The number of unoccupied exemptions has remained relatively steady each year since 2005 with the exception of a slight increase in 2008, with levels of unoccupied exemptions being at 46,530 in 2005 and 44,143 in 2020.

After a decrease between 2005 and 2006 the total number of long term empty properties and second homes increased from 52,823 in 2006 to 66,053 in 2012 (13,230 dwellings or 24%). It has since fallen to 59,763 in 2014 before increasing to 65,277 in 2019 (with a slight peak of 63,736 in 2015). In the latest year, the total number of long term empty properties and second homes has increased by 10% to 71,999 in 2020, driven by the increase in empty homes