The homes no-one lives in.

 

Statistics from the Ministry of Housing, Communities and Local Government (MHCLG) recorded that, as of October 2018, there were 634,453 vacant dwellings in England, with 216,186 being long-term vacant (vacant for at least six months). (Housing policy is a devolved matter meaning that UK Government statistics and responsibilities are for England only.) Long-term vacancies have increased since 2016, having previously fallen between 2008 and 2016 (however, figures from before and after 2013 are not directly comparable due to changes in council tax rules – local authorities were given the power to impose a council tax surcharge on long-term vacant properties that had been empty for at least two years, rather than six months) [1].

 

Overall, approximately 2.5% of English dwellings are reported vacant and roughly 1% long-term vacant. Vacancies are highest in the north of England and lowest in London and the south. There are reasons to believe that the official figures on vacant homes may be underestimates. Firstly, the changes to council tax rules in 2013 already mentioned. Additionally, other council tax rules may lead to undercounting: properties exempt from council tax, including clergy dwellings or dwellings held by mortgage lenders or bankruptcy trustees, which may be unoccupied are not recorded; neither are derelict properties counted as dwellings for council tax purposes [2].

 

MHCLGs statistics on homelessness in England reported that 4,266 people slept rough per night as of autumn 2019 [3] and that 98,300 households werein temporary accommodation as of Q2 2020 (a figure that was increased as part of the government’s “everyone in” response to Covid-19) [4]. The charity Shelter estimated that 280,000 people in Britain were homeless in 2019. In a reverse of vacancy, homelessness is most prevalent in London and the south, as well as other major cities like Birmingham and Manchester, and less prevalent in the north of England more generally [5].

 

A cursory glance at figures would suggest that there are enough long-term vacant dwellings in England that less than half of the total would be enough to accommodate all rough sleepers and every household in temporary accommodation. However, it’s not quite as simple as that given the predominance of homelessness in the south and vacancies in the north, broadly speaking. E.g., London had a recorded 20,237 long-term vacant dwellings as of 2018 but 56,560 households in temporary accommodation – 69% of the English total [6]. Incentivising the owners of long-term vacant properties to let or sell their properties could potentially bring about a substantial reduction in homelessness, but is unlikely to eliminate it.

 

Bullion bars in the sky.

 

The phrase comes from a 2014 speech by Boris Johnson, then Mayor of London, criticising foreign speculators who bought property for speculative purposes and left it vacant.

 

A House of Commons library briefing from 2017 was non-committal on whether foreign-owned empty properties were a significant issue. In 2013-14 7% of sales in Greater London were made to overseas buyers, rising to 32% in prime locations such as Westminster, Kensington, and the City of London. However, the majority of overseas purchases were used as residences for the owners or rented out. The Borough of Kensington and Chelsea did find that more empty homes were located in the affluent parts of the borough, which does suggest that wealthy property owners may be more likely to leave their homes vacant [7]. This would not be surprising: London is one of the world’s major economic hubs with incredibly high demand for homes so most are occupied, but the by-product of this demand is very high real estate values which attract those whose interest is in financial speculation and using property as a store of wealth. A low overall vacancy rate is more to do with the occupancy of more affordable homes rather than the usage of luxury properties.

 

More recently, the Parliament Intelligence and Security Committee’s report on Russian influence in the UK highlighted how the luxury real estate market in London and lax regulations has allowed for wealthy foreign oligarchs, not just Russians, to launder ill-gotten gains by buying London mansions and gain an influential foothold in British politics in the process. Many buyers are also engaged in moving legitimately earned fortunes out of authoritarian states like China to avoid the risk of losing their wealth in a government crackdown, using the London property market as a safe haven [8].

 

Dog in the manger tax.

 

Local authorities in England, Scotland, and Wales already hold the power to impose up to double Council Tax on homes which are vacant for two or more years (the ‘Empty Homes Premium’). However, it is a discretionary power that councils do not have to use, and for shorter-term vacancies and second/holiday homes council can instead apply Council Tax discounts [9, 10]. Applying a levy on holiday homes has been proposed, most recently by the Labour Party [11].

 

Unused land with planning permission would not be subject to Council Tax since that is applied to properties rather than land, however it seems reasonable that some sort of levy should be applied. According to the Valuation Office, merely granting planning permission to a plot of agricultural land in England raises its’ average value from £21,000/hectare to about £6 million/hectare [12]. Developers have been accused of ‘land banking’, where they focus on simply gaining planning permission to increase the value of their land and then delay actually building the planned homes [13]. “Use it or lose it” powers have been proposed as a solution, involving the Government forcibly purchasing land with planning permission that is left unused [14].

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1https://www.gov.uk/government/statistical-data-sets/live-tables-on-dwelling-stock-including-vacants (data from table 615)

2https://researchbriefings.files.parliament.uk/documents/SN03012/SN03012.pdf

3https://www.gov.uk/government/publications/rough-sleeping-snapshot-in-england-autumn-2019/rough-sleeping-snapshot-in-england-autumn-2019

4https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/930534/Statutory_homelessness_release_Apr-Jun_2020.pdf

5https://england.shelter.org.uk/media/press_release/280,000_people_in_england_are_homeless,_with_thousands_more_at_risk

6https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/764301/Statutory_Homelessness_Statistical_Release_April_-_June_2018.pdf

7https://commonslibrary.parliament.uk/social-policy/housing/empty-homes-and-overseas-buyers-what-do-we-know/

8https://www.wired.co.uk/article/russia-report-real-estate

9https://www.gov.uk/council-tax/second-homes-and-empty-properties

10researchbriefings.files.parliament.uk/documents/SN02857/SN02857.pdf

11https://www.theguardian.com/money/2018/sep/23/second-home-tax-labour-policy-double-council-tax-homelessness

12https://www.theguardian.com/cities/2017/jan/31/britain-land-housing-crisis-developers-not-building-land-banking

13https://www.bbc.co.uk/news/uk-43287565

14https://www.independent.co.uk/news/uk/politics/developers-real-estate-homes-planning-permission-unbuilt-social-housing-crisis-figures-a8212641.html