How to make money from derelict property ‘hidden gems’ as 1.55 million stand abandoned

More than one million homes across England and Wales are standing abandoned and derelict, yet many may be unaware they can make some money from these “hidden gems”.

Research by property lender Together has identified concerns over the scale of crumbling and derelict property, with 46 percent of those surveyed worried the situation will only get worse if it isn’t addressed urgently.

Nearly half of UK adults (49 percent) said they want to see abandoned or derelict buildings in their cities revived for new purposes such as housing, business or retail.

Meanwhile, two-fifths said they feel unsafe due to the volume of abandoned buildings in their local city.

Together’s analysis of Census and Local Authority data found that as of 2023, a total of 1.55 million residential homes worth £532billion stood empty across England and Wales, with Westminster the worst offender with nearly 36,000 vacant homes.

This was followed by Cornwall which has just over 28,000, and Birmingham with just under 26,000. Other offenders in the top 10 include Liverpool, Leeds, Camden and Manchester.

Together said the homes are technically “abandoned” - with no usual or short-term residents in place, or used as a second home, without any clarity on plans for sale or redevelopment.

Ryan Etchells, Chief Commercial Officer at Together commented: “The 1.55 million abandoned residential properties seen across England and Wales is concerning and has the potential to worsen without proper address. Indeed, in the run-up to the General Election, this should sit high on political agendas.”

However, Mr Etchells noted that there are some actions people can take if they spot an abandoned property in their local town or city in the meantime. He said: “Buying and flipping these abandoned properties yourself can be one route onto the property ladder.”

However, for those who don’t plan to make a purchase, Mr Etchells said: “Websites like YouSpotProperty.com are a great resource to keep in mind as they offer financial incentives for reporting properties, which match their criteria for potential future development and transformation projects in your local community. All you have to do is complete the ‘Report a Property’ form and, if applicable, the firm will get in touch with you and send a gift voucher.”

If the platform purchases the property, its website states that the property reporter will receive a “further reward” of one percent of the purchase price (capped at £10,000).

For those who may be interested in transforming one of these property projects themselves, Mr Etchells said: “It’s important to start by determining the existing ownership.

“To do this, you need to submit a form and statement of truth to the Land Registry, and if unchallenged for 65 days you gain temporary ownership, then after two years, the property will become yours. You can also report it to your local council or authority or contact a local property developer to see if it is registered and whether any plans for the site are already underway.

“When it comes to funding options for these types of major ‘doer-upper’ projects, it’s well worth considering a bridging loan to help with quick financing and renovation costs.”

He added: “Whether you’re looking to snap up one of these hidden gems yourself, or simply just report it, following these steps can help you manage abandoned properties effectively and potentially benefit from their redevelopment.”

To help those interested in renovating or restoring a building, TV property expert Lucy Alexander partnered with Together to share some “top tips” to consider.

Lucy Alexander, Hidden Gems campaign ambassador, said: “While my personal passions - property and TV have driven my interests to uncover ‘hidden gems’, the same, understandably, may not be said for all residents who share the same postcode.

“It’s a shame to see these derelict properties presenting such a concern for the British public, especially when considering the potential they hold, but it is equally promising to see the clear appetite for change.”

Check the energy usage of the abandoned property

Confirming how much energy and running costs of an existing building before purchasing is “critical”, according to Ms Alexander.

She explained: “Set ample time aside to contact the supplier and check you are on the best energy tariff for the property. With 34 percent of people currently planning to rent out their refurbished abandoned building; this is even more important to consider ahead of time so as to budget accordingly and avoid any nasty cost shocks.

“The Government’s new minimum EPC deadline of 2025 requires owners to have a minimum C rating which can mean retrofitting energy efficient standards is required.”

Check if the abandoned property is listed

If opting to buy a listed abandoned or derelict building, consent must be applied before making any major changes.

Ms Alexander said: “To check if your property is listed head to The National Heritage List for England (NHLE) for confirmation, this is provided based on the given postcode.

“Once you have identified if your building is listed make sure to check which Grade it is as there are three different requirements for each.”

Check which mortgage best fits the abandoned property

When purchasing an abandoned or derelict property, people may also wish to consider using a bridging loan, as these offer a “short-term solution” to unlock faster cash flow.

Ms Alexander said: “These are particularly effective if buying an abandoned property via auction or via specialist property portals. In fact, Together is seeing a marked increase in these types of cases already this year. It’s worth noting that bridging loans are also a handy way to help fund the renovation finances needed, too.”

Check the budget covers the abandoned property renovations

Finally, Ms Alexander noted: “Renovating an abandoned or derelict property can quickly run up high costs unless you have careful budgeting and a strict finance plan in place early on.

“Depending on the structure of the site and scope of work needed, it can also be far more complex than doing the same for newer buildings. Working closely with your local council and authorities is recommended for these types of projects; particularly if you need to apply for special planning permissions.”