There are 101,445 vacant properties in Scotland, according the Bank of Scotland…

These properties represent 4.2% of the Scottish dwelling stock. The number of vacant properties in Scotland has fallen by 4,867 (5%) over the past three years from 106,312 in 2003.

Eleven local authorities (LAs) – more than one in three - in Scotland have at least 5% of their dwelling stock vacant compared to 14 LAs three years ago. The most vacant properties are in the Western Isles (13.4%), Argyll & Bute (11.1%) and the Highlands (8.7%). Many of the vacant properties in these areas will be second homes.

The highest numbers of vacant properties are in Glasgow (10,395), Edinburgh (9,633), Highland (9,279) and Fife (7,607).Vacant properties include empty homes and second homes. Data covers both the private and public sectors.

The average house price in nine of the 11 LAs with a high (5% plus) level of vacant homes is lower than the Scottish average. The discount is, on average, £18,532 (11%). The discount is largest in the Western Isles - the LA with the most vacant properties - at £57,612 (34%).

Nine of the 11 LAs with a high level of vacant homes have average earnings below the Scottish average.  Average weekly full-time earnings in areas with a high level of vacant homes are, on average, 4% below the Scottish average.

Rise in vacant properties in ten areas in past three years

There was a rise in the proportion of vacant properties in ten LAs over the past three years. The biggest rises - all 0.4 percentage points - were in East Renfrewshire, West Lothian and Dumfries and Galloway.  Nonetheless, East Renfrewshire (2.5%) and West Lothian (1.8%) still have vacancy rates well below the Scottish average of 4.2%. However, the vacancy rate in Dumfries and Galloway (5.3%) is above the Scottish average.

There are four LAs with less than 2% of their dwelling stock vacant. The smallest vacancy rate is in East Dunbartonshire (1.0%), followed by North Lanarkshire (1.6%), Mid Lothian (1.6%) and West Lothian (1.8%).

Six LAs had at least a 1 percentage point fall in the proportion of vacant homes over the past three years. The biggest falls were in the Orkney Islands (-5.8 percentage points to 8.3%) and North Ayrshire (-3.0 percentage points to 4.4%). However, all six LAs still had a higher proportion of vacant homes than the Scottish average.

Restoring an empty home vacant less than two years attracts 17.5% VAT

The cost of restoring an empty home attracts the full rate of VAT (17.5%) unless the property has been vacant for more than two years when a reduced rate of VAT of 5% applies. A property vacant for more than ten years, which is renovated and sold, attracts a zero rate of VAT. By contrast, new build properties are not liable for VAT on construction costs.

Bank of Scotland estimates 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 less than two years would be

£5219. This is three and half time more than the VAT for restoring an empty home vacant for more than two years, which would attract an average VAT payment of £1,491.

Intervention needed

Martin Ellis, Chief Economist at Bank of Scotland, commented: "While the number of vacant homes in Scotland has fallen by nearly 5,000 over the past three years, there are still more than 100,000 vacant properties across the country. These properties represent a combination of empty homes in neglect and second homes.”

“Rising property prices have encouraged the rejuvenation of empty homes in many parts of Scotland.  However, it is clear intervention is needed in areas with a high level of empty homes as these are often deprived areas."