How empty buildings could help solve Britain’s housing crisis
On any walk through a British town centre, the signs are familiar: shuttered shops, quiet office blocks, empty leisure spaces. Often seen as symbols of decline, these buildings may instead represent one of the UK’s biggest untapped housing resources. New LSE research suggests that more than 500,000 homes could be created by converting empty non-residential buildings – a figure that could significantly reshape the housing debate.
Rather than focusing solely on building new homes, the research highlights how existing spaces – those already connected to infrastructure and often located in desirable urban areas – could be repurposed quickly and efficiently.
The opportunity in vacancy
The LSE report, Replacing Empty Spaces with Productive, Green Places, was commissioned by Habitat for Humanity GB, the international charity fighting global poverty and homelessness. It points to a substantial supply of underused buildings. In England alone, there are around 175,000 privately-owned, empty non-residential properties. Many are structurally sound and well-located, making them strong candidates for residential conversion.
This challenges longstanding assumptions about housing supply.
Laura Lane, Policy Fellow at LSE Housing and Communities at the Centre for Analysis of Social Exclusion at LSE, explains: “For decades, policy has prioritised new construction, often overlooking the potential of existing buildings. Yet offices, retail units and other commercial spaces already have key features needed for housing, from utilities to central locations. Converting them could be faster and less resource-intensive than building from scratch.”
The speed and practicality of converting empty buildings
One of the strongest arguments for conversion is speed. Traditional housebuilding is slowed by planning processes, land availability and rising construction costs. Retrofitting existing buildings bypasses many of these hurdles, allowing homes to be delivered more quickly. This matters in a system under strain.
Laura Lane adds: “With thousands of households in temporary accommodation, delays in housing delivery have real human and financial costs. Reusing existing buildings offers a more immediate way to increase supply and relieve pressure on local authorities.”
A lower-carbon approach
The environmental case is equally compelling. Construction is a major source of carbon emissions, largely due to the materials and energy required for new builds. By contrast, retrofitting significantly reduces environmental impact by reusing existing structures and minimising waste.
“This aligns with the UK’s climate commitments,” says Laura Lane. “Rather than treating housing delivery and sustainability as competing priorities, conversion offers a way to advance both. We are recommending a ‘renewal-first’ approach – prioritising reuse over demolition and new construction.”
Reviving town centres
There are also wider social and economic benefits. Empty commercial buildings often cluster in struggling high streets, contributing to decline. Converting them into homes could help revitalise these areas by increasing footfall and supporting local businesses.
Bringing residents back into town centres can create more active, connected communities. It also reduces reliance on cars, as people live closer to jobs, services and public transport, which is another environmental advantage.
What’s holding housing conversion back?
Despite the potential, several barriers limit progress. Tax policy is a major one: while new builds are typically exempt from VAT, most conversions are taxed at 20 per cent, making them less financially attractive. This creates a system that favours new construction over reuse.
There are also regulatory and planning challenges, along with uncertainty for developers. The report calls for targeted reforms, including VAT changes, better funding access, and clearer guidance for local authorities.
A shift in perspective on the housing crisis
Ultimately, the challenge is not just technical but political. The buildings already exist, and the need for housing is clear. What’s required is a shift in how we think about supply.
The research suggests that the UK’s housing crisis may be less about a lack of space and more about how space is used. A disused office or empty shop can be seen not as a failure but as an opportunity. Solving the housing crisis may not depend solely on building more but on making better use of what is already there.
Laura Lane was talking to Joanna Bale, Senior Media Relations Manager at LSE.
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