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25 October 2013updated 26 Sep 2015 10:46am

Coalition in good policy shock: Getting empty homes back on the market

Last year, there were more than 700,000 homes in England standing empty. Finally, something is being done about it.

By Jonn Elledge

You may have missed this (they’ve kept it pretty quiet), but Britain is in the grip of a housing crisis. All the same, in 2012, at a time when the deposit on your first flat was basically visible from space, there were more than 700,000 homes in England standing empty; 260,000 of them had been abandoned long term.

These are not holiday homes, you understand (those are an entirely different mess); these are dwellings someone owns but has effectively left to rot. Not all are in places suffering a housing shortage, but plenty are. Nearly 24,000 of them are in London. The city’s housing market being what it is, most of these, it’s fair to assume, could be of use to someone.

And yet, our political masters have historically put remarkably little effort into turning these back into homes. Not that long ago you’d actually get a discount on your council tax on any property that was sitting empty.

In April, though, that changed: now local authorities can charge higher taxes on landlords who leave properties unoccupied, to encourage them to bring homes back into use. This might actually be working.

Homes are left unoccupied for a number of reasons. In some areas (London is not one) it’s a function of the local housing market. According to David Edwards, chief executive of the pleasingly literal Empty Homes charity: “There are parts of the country where property prices and rental values are so low that, even if a home accumulates £10,000-£20,000 of work that needs doing, it’s not viable to bring it back into use.” Austerity is a factor, too: in some areas, estates were cleared out, pending regeneration programmes that never came.

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There are empty homes, though, that can and should be lived in: those inherited but not sold on, or buy-to-let properties whose owners only managed the buying part. Until recently, if you were sat one of these, a council would actually give you a 50 per cent discount on your council tax.

This kind of makes sense, in there was no one inside to use council services, but it did mean that landlords had precious little incentive to bring crumbling homes back into use. They’d lose the potential rental income (poor lambs) – but, with houses having effectively turned into magic money machines, their value would no doubt rise anyway. Why spend money cleaning the place up?

This year, though, the rules changed. Now you still get a 50 per cent discount for the first six months a property sits unoccupied (previously this bit was free), but then you pay full whack. Those properties that sit empty for more than two years actually incur more council tax, 150 per cent of the local norm. (There are a few exemptions: homes that have been condemned, whose owner has recently died, whose regular occupant is in prison, that sort of thing.) In theory councils can opt out of this, but central government assumes they’ll all do it, so they have to fund any further discounts from their own budgets. Most are unlikely to bother.

This seems, actually, to be working: Camden council in north London said a few weeks back that it’s helped bring a third of its empty properties back into use (that’s only 86 of them, but you’ve got to start somewhere). Theo Blackwell, its cabinet member for finance, wants to go further, and has written to Eric Pickles asking for powers to double council tax after a year. In the Ham & High, Julie Kelly, of local property managers Wellmanage, complained that, “It just seems like another way of extorting money out of private landlords”, showing that she’d correctly grasped the point of the exercise.

There is a slight danger here, Edwards warns. Increasing council tax might simply eat into the money that landlords could have spent on renovations: “It potentially makes the property even less viable.” But in areas like Camden, where property is worth a fortune and demand runs way ahead of supply, he can see the argument for charging higher taxes still. The solution may be for Whitehall to bite the bullet and give councils the flexibility to manage their own affairs.

None of this is going to solve the housing crisis. There aren’t enough homes standing empty, and anyway, in a city like London, council tax will always look like pennies compared to the capital value of a home.

But if this policy can turn any empty house back into a home, it’s probably worth persevering with. Best of all, it’d send a message that housing exists to be lived in, not to add a few more noughts to your bank account. It’s not much, but it’s a start.