Reviving London: A Stronger Stance on Empty Homes Needed
As the sun sets on Commercial Road, the tower blocks that line the street loom large, their windows darkened against the night sky. A mere glimpse upwards reveals that only a fraction of these residential units have their lights on, suggesting that they are sparsely inhabited. This scenario is not exclusive to Commercial Road; a similar pattern can be observed in many residential blocks across Zones 1 and 2 of London. The discrepancy between the number of housing units and the actual occupancy rates raises concerns about the utilization of these properties and their impact on the city’s housing market.
A 2020 study by the Greater London Authority shed light on the issue, revealing that many properties in prime London locations serve as “safety deposit boxes” for foreign investors. These investors, primarily from countries like Dubai, Hong Kong, Shanghai, Singapore, and Bangkok, purchase properties as an investment rather than as a place to live. Developers, in turn, cater to this demand by designing and pricing developments to attract international buyers, perpetuating the cycle of empty homes in the city.
The Empty Homes Council Tax Premium (EHCTP), introduced in 2013, allows local authorities to levy additional charges on properties that remain unoccupied and unfurnished for extended periods. Despite the implementation of this premium, the number of long-term empty properties in London has continued to rise, indicating that current measures are insufficient to address the issue. While some boroughs have successfully raised revenue through the EHCTP, the overall impact on reducing empty homes remains limited.
A closer look at the data reveals a stark contrast between the number of empty properties and the effectiveness of the EHCTP in incentivizing their occupation. Southwark, Newham, Barnet, Lambeth, and Kensington & Chelsea top the list of boroughs with the highest number of long-term unoccupied properties. While some boroughs have managed to generate significant revenue through the premium, the overall trend of increasing empty properties suggests a need for more proactive measures to address the issue.
One such measure could be the implementation of Empty Dwelling Management Orders (EDMOs), which empower local authorities to take control of vacant properties that have been unoccupied for an extended period. However, the lack of data on the usage of EDMOs in London highlights a significant gap in monitoring and addressing empty homes. Without comprehensive information on the effectiveness of such orders, it is challenging to evaluate their impact on the housing market.
Drawing inspiration from the Canadian model, London could benefit from adopting a more assertive approach towards empty homes. Cities like Toronto and Vancouver have implemented measures such as the Empty Homes Tax (EHT) and the Speculation and Vacancy Tax (SVT) to curb the proliferation of vacant properties and encourage their utilization for long-term rental purposes. These taxes have not only reduced the number of empty properties but also generated revenue to support affordable housing initiatives in the respective cities.
The success of Vancouver’s EHT and SVT in driving down vacant properties and increasing the supply of long-term rental housing serves as a compelling case study for London. By imposing taxes on empty and underutilized properties, the city can create a financial incentive for property owners to occupy or rent out their properties, thereby addressing the housing shortage and promoting affordability in the market. The allocation of tax revenue towards affordable housing initiatives further underscores the potential benefits of such measures.
In light of the housing affordability crisis and the persistent issue of empty homes in London, it is imperative for policymakers to reevaluate existing strategies and explore innovative solutions to revitalize the city’s housing market. The implementation of targeted taxes, enhanced monitoring mechanisms, and proactive measures to incentivize property occupancy can help address the root causes of empty homes and create a more sustainable and inclusive housing environment for all Londoners.
Empty Homes in London: A Growing Concern
The prevalence of empty homes in London has been a pressing concern for policymakers and residents alike. While the city faces a severe housing shortage, a significant number of properties remain unoccupied, contributing to the imbalance between supply and demand. The phenomenon of “safety deposit boxes” for foreign investors has further exacerbated the issue, as prime properties in desirable locations are purchased as assets rather than homes.
The introduction of the Empty Homes Council Tax Premium (EHCTP) was intended to deter property owners from leaving their homes vacant for extended periods. However, the data suggests that the premium has had limited success in incentivizing property occupation. Despite generating revenue for some boroughs, the overall trend of increasing empty properties underscores the need for more effective measures to address the issue.
A Case for Stronger Measures: Lessons from Canada
Canada’s proactive approach towards empty homes, particularly in cities like Toronto and Vancouver, offers valuable lessons for London. By implementing taxes on vacant properties and targeting foreign ownership, Canadian authorities have successfully reduced the number of empty homes and increased the supply of rental housing. The allocation of tax revenue towards affordable housing initiatives further highlights the positive impact of such measures on the housing market.
The Empty Homes Tax (EHT) and the Speculation and Vacancy Tax (SVT) have proven to be effective tools in curbing empty properties and promoting long-term rental housing. The success of these measures in Vancouver serves as a compelling example of how targeted taxes can incentivize property owners to utilize their properties and contribute to the overall housing market. London could benefit from adopting a similar approach to address its empty homes crisis.
Towards a Sustainable Housing Market
As London grapples with the challenges of housing affordability and empty homes, it is crucial for policymakers to rethink existing strategies and explore innovative solutions. By strengthening monitoring mechanisms, implementing targeted taxes, and incentivizing property occupation, the city can create a more sustainable and inclusive housing market for all residents. Drawing inspiration from successful models like the Canadian approach, London has the opportunity to revitalize its housing sector and address the pressing issue of empty homes.