has called on the Government to
allow London’s boroughs to increase Council Tax bills for
high-value homes that are left empty.
The Mayor’s action is in response to a report he commissioned
last year – the most thorough of its kind ever undertaken in
Britain – into the role of overseas investment in the capital’s
property market. The research, carried out by the London School
of Economics and the University of York, looked at the
contribution of overseas investment to new housing supply, as
well as public concerns over homes being sold to overseas buyers
and kept empty.
In its findings, the research found the number of entirely empty
homes to be very low overall, but suggested there were greater
numbers of empty homes in prime and expensive locations.
The Mayor has written to Government asking that boroughs be able
to boost the empty home Council Tax levy on high-value properties
above the current 50 per cent of Council Tax allowed.
In his letter the Mayor said councils should be able to charge
this levy at a meaningful rate that would incentivise occupation,
or at the very least generate a more substantial receipt that
could support investment in new affordable homes and other
measures to tackle the housing crisis. He cited the case of
Westminster’s top Band H, where properties may be worth many
millions of pounds but the empty homes levy would currently be no
more than £688 a year.
The Mayor of London, , said: “The housing crisis
is the biggest challenge facing our city today and I’ve been
honest with Londoners from the start – we won’t turn things round
overnight. This is going to be a marathon, not a sprint and
we need to be able to take robust action to tackle it.
“In the midst of a housing crisis, just one home left unoccupied
is one too many. That is why I will be working closely with
boroughs like Westminster City Council to fight Londoners’ corner
by calling for the Government to allow boroughs to charge
a higher Council Tax on empty properties at a rate that
makes a difference.”
The Leader of Westminster Council, Cllr Nickie Aiken, said: “I
support the Mayor’s proposal for greater flexibility to be
afforded to local authorities around the amount that could be
levied on empty homes. Not only is it an important message to
send out, it would also generate additional funds to be invested
in our areas for the benefit of local residents. Along with the
Mayor I have made it my priority to ensure that we have genuinely
affordable housing in the heart of the capital.”
Ian Fletcher, Director of Real Estate Policy for the British
Property Federation, said: “The Mayor’s suggestion that there
should be a higher council tax premium on empty homes is worthy
of consideration from Government, within the wider context of
what is and what is not currently working to prevent empty
properties.”
Hugh Bullock, who chaired the Overseas Investment Sub-Group of
the Homes for Londoners Board overseeing the LSE/York research,
said: “The Sub-Group has made a number of recommendations.
Although the research found that the overall number of empty
properties in London is low, I welcome this response of the Mayor
to the recommendation concerning Council Tax.”
ENDS
Notes to editors:
- In September last year, the Mayor of London launched an
in-depth and wide-ranging inquiry into the different roles
overseas money plays in the capital’s housing market, which
included understanding the proportion of new homes kept empty in
London and how many are owned by foreign buyers.
- LSE was asked to focus on four main areas:
What proportion of new homes is sold to buyers who are resident
overseas?
What proportion of new homes is kept empty and how many of these
are owned by foreign buyers?
How reliant is development viability on sales to overseas buyers?
How does overseas financing of development contribute to housing
supply?
- LSE’s research brought together evidence from market
commentary, data from major estate agencies and industry research
bodies, interviews with developers, financiers, managers of
developments and data from the London group of the House Builders
Federation.
- York used a sample of 8,000 Land Registry titles of new build
property sales for every London borough were obtained to provide
figures for between April 2014 and March 2016.
