Friday, Nov 24, 2017

Empty Homes spike in London commuter belt

BBC Busines: Empty Homes spike in London commuter belt

"Buy-to-leave" investors were active in those areas, experts said.
The government gave councils new powers to charge a 100% council tax premium on empty homes in Wednesday's budget
Are they going to enforce it?

Posted by magnifico @ 11:29 AM (6246 views) Add Comment


1. sneaker said...

100% premium on Council Tax simply isn't enough.

The social collateral damage of Buy To Leave is vastly higher.

And your average oligarch won't give a monkey's about a few extra grand a year. It's the cost of insuring a stolen fortune/ Versus losing 100% of it if they declared it back home, there is much higher for the premium to go.

Crank it higher!

Friday, November 24, 2017 12:05PM Report Comment

2. magnifico said...

Fair comment sneaker. These are the same people who' ll dump their stock as soon as the bubble bursts though.Interesting times ahead...

Friday, November 24, 2017 07:38PM Report Comment

3. mombers said...

If there's such a bad housing shortage, why so many empty homes? There are more bedrooms per capita than ever before, it's a question of poor utilisation due to there being no price signal via higher council tax for the most valuable homes and zero council tax for the least valuable ones. In fact, there's a 25% reward for under-occupying (single person discount).
Hammond missed a big trick in the budget by not reducing stamp duty for downsizers. They now have an even higher penalty for doing so as they'll have to stump up up to £5k more to match a bid by a FTB.

Monday, November 27, 2017 10:21AM Report Comment

4. taffee said...

If there was a shortage of homes in UK you
Wouldn't need and demand side props

It's the biggest lie out there

Tuesday, November 28, 2017 06:35AM Report Comment

5. nickb said...

Yes. Census population figures divided by DCLG dwelling stock figures:

1951: 3.56 persons per dwelling
1961: 3.17
1971: 2.88
1981: dwellings missing
1991: 2.44
2001: 2.32
2011: 2.29
latest available estimtates for population for 2014 yield 2.3 persons per dwelling.

Tuesday, November 28, 2017 12:02PM Report Comment

6. mombers said...

@5 I don't know what a fully supplied housing market would look like. I'm sure everyone would love a 4 bed detached house with a big garden. Is that what we should aim for????

Tuesday, November 28, 2017 02:19PM Report Comment

7. khards said...

Those figures really reflect the drop in the number of kids people have.

Tuesday, November 28, 2017 04:45PM Report Comment

8. icarus said...

....and the number of older people living alone.

Tuesday, November 28, 2017 06:43PM Report Comment

9. nickb said...

Whatever is behind the figures, I think they give the lie to the physical shortage argument. It's credit conditions. Hopefully a credit-fuelled speculative bubble because if it's not a bubble there will not be a crash.

Wednesday, November 29, 2017 11:45AM Report Comment

10. icarus said...

But houses are getting smaller in the UK - to make them 'more affordable'. and Then an ageing population must mean more people living alone

Wednesday, November 29, 2017 05:18PM Report Comment

11. nickb said...

There are more dwellings per capita than ever before. People have fewer kids, old people live alone, but they would not have been able to en masse with the 1950s stock level. They also get shoved into old folks homes now. Where is the evidence of a "physical shortage" and what would constitute such evidence if not fewer dwellings per capita?
To my mind the narrative that we need to build more because prices are high is dominant because it suits the main vested interests: banks, developers, landowners and therefore politicians. It's not based on evidence that bears scrutiny.

Thursday, November 30, 2017 10:23AM Report Comment

12. icarus said...

Sure it's all caused by US monetary imperialism. Bubbles, asset-stripping, austerity, creditor-oriented rules, the dollar's reserve status and the size of the US military. This is how it's been done for the last century

But more dwellings per capita isn't sufficient evidence for homes not being in short supply because of the kind of factors @ 3, 7 and 10.

Thursday, November 30, 2017 11:36AM Report Comment

13. nickb said...

The point is rather that homes being in short supply does not explain the trend in prices. Most people are shocked when they learn that there are more dwellings per head than before, because this is excluded from the media narrative. My question is: what does constitute evidence that homes are in short supply? 3, 7 and 10 don't amount to that evidence. 3 and 7 in fact add to a case against there being a supply shortage.

Thursday, November 30, 2017 02:07PM Report Comment

14. mombers said...

The absence of price signals for many occupiers is behind the shortage IMHO. An old widow in a mansion has no incentive to downsize - in fact there is a big penalty by way of stamp duty. A proper shortage would be every home jammed to the rafters and no empty homes

Thursday, November 30, 2017 05:47PM Report Comment

15. nickb said...

the 'shortage' evidenced by what?
(not prices, since other factors can explain... not bedrooms per capita. not homes per capita.)

Thursday, November 30, 2017 06:36PM Report Comment

16. mombers said...

@15 there's a shortage for people who have to pay market prices :-) If everyone paid market prices via taxes on rental value, demand would be distributed more evenly as under- and unoccupied homes would be used more efficiently. Combined with a reduction on taxes on labour and capital, economic activity would relocate to cheaper areas.

Friday, December 1, 2017 09:41AM Report Comment

17. nickb said...

Yes! ha ha. Also there would be less potential for speculative gain under LVT and therefore lower prices. I seem to recall some studies confirming all this e.g. Pittsburgh when they had it ...

Friday, December 1, 2017 02:19PM Report Comment

18. tenyearstogetmymoneyback said...

Mombers has made some very good comments in this thread such as the increased Stamp Duty for downsizers which is something I hadn't thought of.

However, as I commented in a discussion elsewhere on Equity Release people I know who have moved in old age haven't released much equity by "downsizing". They have simply moved to a more convenient property e.g. a bungalow.

The other problem with Ultra low interest rates is that if you do raise some money by downsizing what are you going to do with it ?

Stick it in the bank earning much less interest than inflation ?

I have thought before that the Government ought to offer some kind of "house price bond" so that you could benefit from the rises (and maybe the falls)
without having to actually buy a property. In fact thinking as I type maybe allow Housing Associations to sell shares which would be used to buy houses.
In fat that sounds like the original idea of building societies before they got involved in dishing out BTL mortgages to "investors" competing against most off their customers.

Going off topic the article about Equity Release said that Nationwide were offering it. Personally I think it is a terrible idea as it locks people into their houses until death or dementia.

Sunday, December 3, 2017 09:34PM Report Comment

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