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Property Investors In Islington Who Leave Homes Empty Could Face Jail

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Guardian 4/12/14

'Property investors who leave homes empty just to make money from house price rises could be fined or even jailed under proposals made by a London council.

Islington is planning to force owners of newly built homes to prove they are occupied and if homes are left empty for longer than three months owners will face high court injunctions. If breached, judges could order fines, repossession and in the worst cases, jail for owners, the council said.

The drastic action has been proposed as the north London borough revealed that 30% of 2,000 homes built in the last six years have nobody on the electoral register and that even when students and foreign tenants are discounted, close to a quarter of homes in five of the newest residential developments appear to be empty.

Owners will have to prove they are not “buy-to-leave” investors by showing up-to-date utility and council tax bills, evidence of deliveries, registration documents for health services, schools and social services and even showing the homes are fully furnished.

“Our new proposals would make sure that all new homes in Islington are occupied – we want to send a message that ‘buy-to-leave’ is unacceptable,” said Cllr James Murray, executive member for housing at the borough.

The proposal was warmly welcomed by campaigners against empty homes but is likely to be fiercely opposed by property developers.

John Silvester, a former president of the Planning Officers Society, said he believed such a use of the planning system was unprecedented and warned it might be challenged on the grounds that it seeks to kerb established rights among property owners.

The boom in investment in homes is being felt across the capital. Research consultancy Molior found that in developments of over 20 units in London, over 70% of new-build sales in the £1,000 to £1,500 per square foot range were to investors, and over 50% in the £700 to £1,000 per square foot range. It said some are “held as permanently available hotel suites” by the owners.

The draft measures will go out to consultation on Monday and represent the first time a council has tried to tackle buy-to-leave using planning powers. Under provisions inserted into section 106 planning agreements before properties are built, new homes can not be left unoccupied or unused for longer than three months, and have to be occupied for at least 14 days in any three-month period. Developers selling the new homes will have to make clear in marketing brochures and in advertising that the obligation will fall to the buyer.

The obligation will require owners to “use and occupy the individual dwellings as a dwelling house or to ensure such use and occupation”. Generation Rent, the campaign group for more affordable rented homes, welcomed the initiative for giving first-time buyers a better chance of bidding successfully for new homes.

“To people used to property as a speculative asset, this might seem harsh, but if you look at housing as something for people to live in there is no reason not to treat buy-to-leave punitively,” said Seb Klier, Generation Rent’s policy and campaigns manager. “If we are really serious about helping first-time buyers we have to take punitive action against those who see housing as an investment asset only.”

Islington is the most densely populated local authority area in the UK, according to the 2011 census. Under the London plan the borough is required to ensure 12,641 homes are built between 2015 and 2025 and with very little land available, the council wants to ensure all homes contribute to meeting housing need.

According to council research, as many as a third or more of homes in some new developments are potentially vacant. Of almost 2,000 units built in blocks in the borough since 2008, 30% have no registered voters and the percentage rises considerably when social housing is filtered out and market housing analysed. Of the 58 private apartments in the 1 Lambs Passage development, 71% had no voter registered, while 65% of the 106 in Worcester Point had no one registered.

Even taking into account apartments where students are registered for council tax exemption, or the leaseholder appears to have let the property to a tenant who may not be eligible to vote, and cases where the flat is being operated as a serviced apartment, there are still high levels of unexplained non-registration. Forty-five percent of the 127 market units in the Bezier building in the borough fall into that category and 33% of the Worcester Point building.'

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What about property investor who leave them empty cause prices have collapsed and they can't afford to sell and no one wants to rent them ?

There is something wrong with the MSM.

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even when students and foreign tenants are discounted, close to a quarter of homes in five of the newest residential developments appear to be empty.

some are “held as permanently available hotel suites” by the owners.

THE SYSTEM IS VERY SICK INDEED

Edited by GinAndPlatonic

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What about property investor who leave them empty cause prices have collapsed and they can't afford to sell and no one wants to rent them ?

There is something wrong with the MSM.

Tough, prison

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Currently in Boston (Massachestts), Taxi driver last night told me that 25% of the new condos in the City are empty and owned by wealthy Chinese/Arabs/South Americans. His attitude was the same as often expressed about London, the rich in these countries want to park their money somewhere they can flee to if it turns pear shaped at home. Boston being one of the wealthiest and crime free parts of the states

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Currently in Boston (Massachestts), Taxi driver last night told me that 25% of the new condos in the City are empty and owned by wealthy Chinese/Arabs/South Americans. His attitude was the same as often expressed about London, the rich in these countries want to park their money somewhere they can flee to if it turns pear shaped at home. Boston being one of the wealthiest and crime free parts of the states

Similar in Melbourne, according to Aussie friends who live there. Their daughter and her husband are completely priced out - they and their 2 little kids have lived with them for a couple of years now.

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COULD be finned or jailed ...come back when the could is replaced with WILL, until then this is Dave&co spinning" we are all in it together"

It's a very misleading headline.

The point is that the council could seek an injunction requiring the owners to let/sell the property, if they persistently ignored that then it would be contempt of court leading to criminal penalties.

Chances of anyone being jailed for this are tending towards zero but that's because no sane person would consistently ignore a court order and in any event a more sensible remedy would be confiscation and auction of the property.

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It's a very misleading headline.

The point is that the council could seek an injunction requiring the owners to let/sell the property, if they persistently ignored that then it would be contempt of court leading to criminal penalties.

Chances of anyone being jailed for this are tending towards zero but that's because no sane person would consistently ignore a court order and in any event a more sensible remedy would be confiscation and auction of the property.

I agree. This article makes very little sense and no one will be put in jail

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COULD be finned or jailed ...come back when the could is replaced with WILL, until then this is Dave&co spinning" we are all in it together"

Exactly....... Cry wolf......business as usual.

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It's a very misleading headline.

The point is that the council could seek an injunction requiring the owners to let/sell the property, if they persistently ignored that then it would be contempt of court leading to criminal penalties.

Chances of anyone being jailed for this are tending towards zero but that's because no sane person would consistently ignore a court order and in any event a more sensible remedy would be confiscation and auction of the property.

How can they jail an of shore trust fund /ltd company, as for fines it will be the same as the "fines" imposed on the banks which are nothing more than factored in costs

Edited by long time lurking

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even when students and foreign tenants are discounted, close to a quarter of homes in five of the newest residential developments appear to be empty.

some are “held as permanently available hotel suites” by the owners.

THE SYSTEM IS VERY SICK INDEED

Westminster Council has recently cracked down on the using residential accommodation as hotel suites issue.

http://www.cityam.com/1416535452/exclusive-minister-s-fury-over-airbnb-crackdown

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THE SYSTEM IS VERY SICK INDEED

Indeed. This is a political response to an economic problem.

Supply is not allowed expand to accommodate the demand from an increasing population via immigration, and even if it was, the financial power of international speculators parking their money in £ trumps that of those who earn their money by contributing to the domestic economy.

The result is that we have the worst housing crisis since we were visited by the Luftwaffe, and many of the few homes actually being built are bought and left empty by foreign speculators.

All systemic economic solutions to this problem are unpalatable to the elite, so therefore a populist political response is what we can expect.

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How can they jail an of shore trust fund /ltd company, as for fines it will be the same as the "fines" imposed on the banks which are nothing more than factored in costs

Confiscation and auction.

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All very well in principle, but what will all this cost in practice?. From the original post "Owners will have to prove they are not “buy-to-leave” investors by showing up-to-date utility and council tax bills, evidence of deliveries, registration documents for health services, schools and social services and even showing the homes are fully furnished" - this means a long winded process of snooping around to see if houses are furnished, verifying the above mentioned documents, trying to trace owners who are possibly overseas and don't want to be found, then there's the legal fees, don't forget that if you can buy a property in Islington and leave it empty, then you can very possibly afford a long legal fight, to the Supreme Court and even the European Court of Human rights. If the owner loses ultimately, then whether the council gets its costs back or not probably depends on where the owner lives and what agreements are in force with that Country. The money would be better spent building or improving social housing

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People wouldn't buy to hold if it was made uneconomical to do so.....would be preferable if they bought gold with their spare loot and allow houses for homes. ;)

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and of course there's the general election in the offing. There's been a lot of bad publicity about overseas buyers and there's been the recent by-election results so a populist response to that issue is no surprise.

There have been similar proposals in the past although maybe not with jail mentioned as a penalty. The proposals usually don't come to anything but who knows maybe this time it's different.

The words banker and jail continue to avoid being much associated in the media.

Edited by billybong

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Confiscation and auction.

T hey will simply pay the fines as a factored in cost if their accountants can`t find a loophole that has be conveniently over looked ..turkeys dont vote for Christmas they just make it look like they do

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By pass the middle man (ie council/law of the land etc) and squat......said properties won't be so desirable as investments then will they?

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Unenforceable. More hot air. Simple solution would be 40x council tax on any non-owner occupied property. Crash prices for landlords massively.

But the property owning councillors wouldn't like that.

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According to the Islington Council website, unoccupied properties get a 50% discount after two years. Perhaps this rule change is about ensuring that the council gets full tax on every property in the borough. Having people live in the properties is secondary.

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