So if no fleas, that leaves another type of allergy, an endocrine, or a behavioral problem. Since he is outside and there were some scabs initially, he could have an allergy to something in the air--pollen, weeds, trees, molds, etc, or a food
allergy. An endocrine problem can cause hairloss with no underlying skin irritation
. This can be due to hyperthyroidism
(unlikely at his age, however), diabetes
, or more rare endocrine problems such as Cushing's disease. I assume he is neutered, but if not, intact males can have skin problems, too. Ringworm
(a fungus) is another possibility, although usually the underlying skin is somewhat crusty.
What I generally do when I see these cats is to try a steroid injection first. If it is an allergy, the injection should help and some fur should start to regrow. The injection (Depo-Medrol) will last about 2 weeks and sometimes I will give a second injection if things seem to be improving. If it is an inhalant allergy (ie. not food), often 1-2 injections is all that is needed, the weather changes, and the cat doesn't have any more problems (until next year). Steroids don't usually help with food allergies, however. So if the injection didn't help, I would probably try the cat on a "novel protein" diet--one with a protein source to which he's never been exposed. I usually use venison & green pea. A true food trial with an outside cat is probably impossible, but is worth a try.
I would also do a skin scrape to look for any mites (Demodex cat infect cats, but is very hard to find. Lym Sulfur dips weekly or every other week could be tried, just in case). Bloodwork would be the next step to look for an underlying disease.
Behavior is all that is left if everything else comes back negative or doesn't help.
Since the area is getting bigger, I recommend you have your regular vet take a look and start some diagnostic tests or try the steroid injection.
Hope that helps!