Ministers have been urged to take “urgent measures” against greedy investors who keep homes empty to make bumper profits while ordinary Brits face a housing crisis.
London Mayor Sadiq Khan called on the government to let councils slap greedy investors with effectively uncapped council tax bills on empty homes. And today he's joined by two more Metro mayors calling for greater powers to prevent houses lying empty during a worsening housing crisis.
And Labour ’s Lisa Nandy warned ordinary Brits face were facing “double whammy” of housing costs, “making the dream of home ownership ever more distant.”
Almost 250,000 homes had been sitting empty for more than six months in England as of October 2022 - with an estimated combined value of £73.4 billion. Those empty homes would be enough to house 92% of Britain’s estimated homeless population.
London, where the housing crisis is most acute, had more than 34,000 long-term empty homes worth an estimated £18 billion. Many empty homes are owned by foreign investors, who keep them vacant to make profit as property prices rise. Mr Khan has called on the government to take urgent action to force empty homes back into the housing market.
Councils are allowed to charge a premium on vacant homes, but only after they’ve been unoccupied and unfurnished for more than two years. And they can only increase rates by 100% for homes empty for up to five years.
But under Mr Khan’s plan, councils would be able to hike rates to “whatever level they choose in order to make it an effective deterrent.”
“It’s simply not right that so many homes lie vacant across the country,” he said. “I’m urging the Government to introduce a raft of urgent measures to reduce the number of empty homes. This includes allowing local councils to set much higher rates of council tax on vacant properties.
“We need to provide a proper deterrent against wealthy property owners leaving their homes empty. It would ensure much-needed homes are available for ordinary Londoners to live in.”
Liverpool Metro Mayor Steve Rotherham backed the idea, saying: "Our councils should have the scope to increase council tax to whatever they see fit on vacant properties. We have a housing crisis and there are hundreds of thousands of empty properties."
Oliver Coppard, Labour's Metro Mayor in South Yorkshire agreed regions should have more power to deal with empty properties.
He told this newspaper: "Surely it now abundantly clear that Ministers in Whitehall have no ambition or ability to deliver any sort of housing strategy that gives everyone a decent place to live. Mayors don’t just know our places best, we are ambitious for our communities. It’s time to give us the proper funding, powers and control we need to tackle rogue landlords and empty properties."
A Labour source said: "Mayors will, of course, want to do all they can to ease the housing crisis. Nationally, we are focussed on building more homes."
New figures released this week show that the average house now costs 8.4 times the average annual disposable income. That has risen from 7.6 times when the Tories came to power in 2010.
In England, only households in the top 10% of income can afford an average home with fewer than five years of income. Meanwhile, private rents skyrocketed by 5.1% in the year to June. That means rents are rising almost four times faster now than they were in 2019.
Shadow Housing secretary Lisa Nandy said: “Rents are going up – alongside other costs like energy bills and food – which is reducing the amount that can be saved for a deposit, and at the same time the cost of buying a house keeps rising. All this is making the dream of homeownership ever more distant.
“Labour is proudly the party of homeownership and will support families and young people to enjoy the security that comes with getting on the ladder.
“That’s why we will build more houses, support first-time buyers with a mortgage insurance scheme, and bring in a powerful new Renters’ Charter to make renting fairer, more secure and more affordable in the meantime.”