Rough sleeping continues to rise in the UK, with figures recorded in England significantly higher every month compared to the year prior, up to September 2024, the latest data point. At the same time, more households are in temporary accommodation than at any point since at least 1998, when the data was first recorded (123,100 in England in Q2 2024, of which 78,420 contained children – also a record). There is increasing recognition of the need for bold solutions to address the housing crisis, with the government focused on tools for increasing raw building numbers as the core of their approach. Increasing social and genuinely affordable housing is key, but seems to be given secondary importance. An often-overlooked opportunity lies in the conversion of existing non-residential buildings. This approach offers an immediate, cost-effective, and sustainable response to the housing emergency, while also revitalising communities and supporting local economies.

The rise in remote working, the decline of high street retail, and broader structural changes in the economy have left many commercial properties empty. Habitat for Humanity GB commissioned research to assess the scale of the situation before the full impact of the pandemic was felt. In 2021, around 7,000 non-residential properties owned by local councils in England, Scotland, and Wales had been vacant for more than a year. These unused spaces represent a unique opportunity to quickly expand the housing stock, especially in areas where demand for affordable homes is high.

Traditional methods of building new homes, while essential, are not enough on their own. Land availability, lengthy planning processes, and the growing difficulty of securing financing for large-scale developments all contribute to delays in delivering new housing. Converting vacant commercial buildings into social housing provides a faster, more flexible way to respond to this crisis.

Repurposing existing structures can bypass many of the challenges associated with new builds, such as protracted planning approvals and land acquisition processes. These conversions often have poor reputations, however, with building owners taking advantage of permitted development rights to deliver poor-quality housing. It is crucial that conversions reflect the specific needs of local communities. This is what Habitat GB did when transforming retail units into flats for young care leavers in Barking & Dagenham, East London, and it is a model with huge potential for expansion. Importantly, converting existing buildings is also more sustainable; studies show that repurposing a building typically uses 50-75% less carbon than constructing a new one from scratch when factoring in the embodied carbon of the existing structure, contributing to a more environmentally responsible housing strategy.

The social and economic benefits of such conversions extend beyond the immediate provision of homes. By repopulating town centres with affordable housing, these projects can help reinvigorate local economies. Many town centres have struggled with a decline in retail and commercial activity, and converting vacant buildings into homes can bring new life to these areas. The increase in foot traffic can support local shops, cafes, and restaurants, contributing to a more vibrant and resilient community. 

Despite the clear benefits, converting empty commercial properties into housing is not happening on the scale needed. Local authorities often lack the resources and capacity to drive such projects, a legacy of years of austerity and fiscal constraints. Many councils are also struggling with competing priorities, such as maintenance backlogs and the pressures of meeting fire safety standards in the wake of tragedies like Grenfell. This makes long-term, proactive planning for housing conversions difficult.

However, there are steps the Government and others can take to incentivise and support this approach. The Chancellor putting local government on a sustainable financial footing will be key, along with an acknowledgement that social and truly affordable housing will only be delivered at scale with investment that recognises the wider societal benefits. Until that happens, Habitat GB are exploring how we can work with corporate partners to unlock much needed capital.

While planning reforms have focused on raising targets and encouraging councils to look for open spaces to allocate for housing, specific initiatives and support could also be used to incentivise councils to identify and repurpose vacant sites as part of their housing delivery plans. Creating dedicated “Empty Spaces Taskforces” could facilitate collaboration between the public sector, housing associations, local construction firms and community groups to prioritise and execute conversions.

Another critical reform would be to address the anomaly in VAT policy. Currently, new build properties are exempt from VAT, while conversions and retrofits are not. Extending VAT relief to conversion projects would make them more financially viable and encourage developers and local authorities to pursue this route as an alternative to new builds.

Empty buildings are only part of the answer – our estimate from 2021 was that local authority owned empty buildings could deliver around 19,500 homes. But that figure gets exponentially bigger when you include other public sector buildings, and the vast number of privately owned empty spaces. We estimated in 2021 that there were 165,000 privately owned empty commercial and business premises across Great Britain, and one recent estimate suggested there is 40 million square feet of empty office space in the UK – potentially thousands of extra homes, many already with excellent infrastructure connections. By embracing a strategy that acknowledges the huge cost of temporary accommodation, homelessness and the climate impact of new builds, we can not only address the immediate crisis but also support the long-term regeneration of our town centres and create more sustainable communities for future generations.