Cracking down on empty London properties
Date of Article
Nov 22 2017
Written by
Lisa Simon
Residential services

Keep informed

Sign up to our newsletter to receive further information and news tailored to you.

Sign up now
Get in touch
@ Lisa Simon
Lisa Simon
Partner, Head of Residential
020 7518 3234 Email me About Lisa
Lisa Simon heads up our Residential Division, which includes sales, new homes, BTR, lettings and property management across our national network. She joined Carter Jonas in 2011 and has over thirty years' experience largely in London and the Home Counties working with Landlords and Tenants. Lisa oversees the day to day running of our residential offices and acts as a key contact for our Christies International Real Estate Affiliates and some of our lettings portfolio clients. She also oversees our corporate services department liaising and promoting our properties to companies and their relocation agents.

As the Government attempts to deliver more new homes in an attempt to address the housing shortage, the Mayor of London, Sadiq Khan, has turned his attentions to high-value homes that are left empty.

After commissioning a report in 2016, which looked at the contribution of overseas investment into the delivery of new homes, as well as public concerns over the proportion of homes being sold to overseas investors and kept empty, Sadiq Khan is now looking for solutions.

In a bid to curtail the number of vacant properties in the capital and to maximise occupancy, he has so far proposed an increase in Council Tax bills for empty properties – even though the number of entirely empty homes in the capital is quite low – albeit there is purportedly a concentration in prime areas.

As it currently stands, Sadiq Khan has set out a proposal to Government to permit London boroughs to apply an empty home Council Tax levy on high-value properties above the current 50% Council Tax allowed.

The proposal requests that boroughs are permitted to charge a significant enough levy to incentivise occupation, or at the very least generate a more substantial receipt that could support investment into new affordable homes, alongside other measures that could tackle the housing crisis.

The mayor cites properties in Westminster’s top Band H, which are valued into the multi-millions, but when empty, generate no more than £688 per year.

To date, the Leader of Westminster Council, Nickie Allen, is in support of the proposal.

While the housing shortage must be addressed, Sadiq Khan must also provide greater clarity over his proposals. Landlords are increasingly feeling the strain of additional Stamp Duty, the cost of maintenance attached to EPC reforms, not to mention the abolition of tax relief, so it is crucial to outline when Council Tax levies will apply.

From our perspective, we would urge the Government to afford landlords certain allowances around empty properties; for example, for those who experience a void period – through no fault of their own – a Council Tax levy can’t be justified. If a property is in good condition, realistically priced, and is actively marketed, how can a landlord can’t be accused of exacerbating the volume of empty homes in London? There is also a question of how the system would be policed – and whether the cost of enforcing the ruling would simply absorb any additional revenues generated.

For now, it would seem that the Mayor of London has further work to do on his proposal – otherwise he could be at real risk of dissolving the capital’s lettings market for good.