How can London tackle the empty properties problem?

How can London tackle the empty properties problem?

Empty properties in any city in the UK are an issue, but in London they are particularly problematic, with unused homes only helping to exacerbate the problem where demand exceeds supply and pushes prices towards unaffordable levels.

In the last year, there were ten potential tenants and 9.4 prospective buyers chasing every property that came to market across the nation, Countrywide reported, and this helped to push rental and purchase properties ever higher.

It is estimated that London needs around 50,000 new homes every year to meet demands and keep up with the formation of new households, and while the 30,000 new properties that crop up every year help to cope with demand in some ways, the real problem comes when people are 'buying-to-leave' - purchasing homes and then simply letting them sit vacant.

Because of the annual price rises in the capital, which are averaging at around 15 per cent and only likely to climb further in the next half decade, many people are purchasing homes just to capitalise on the potential profits down the line when it appreciates in value.

The Guardian reports that this practice has seen some 300 homes built in Bishop's Avenue alone in 2008 remain empty ever since as their buyers wait for the future profit rather than putting them to use, either as an integral part of the rental sector, or through selling them to someone who would live there.

But how can London local authorities deal with this issue and tackle the scourge that is long-term empty homes?

In the past, the government has toyed with the idea of increasing council taxes for homes that have been sitting empty for an extended period, which it was thought would incentivise owners to use them.

However, this only allows councils to charge an extra 50 per cent on tax after a property has been vacant for two years, and as a result, the issue is still just as prevalent as it has ever been.

Now, however, plans to tackle the empty mansions problem in Bishop's Avenue could pave the way for a new strategy that could once and for all stop the practice and bring more homes to market to help cope with the demand.

According to reports, the local authority in the area is looking at making the positive move of fining those who leave properties unoccupied for extended periods.

It has said that if a home sits without a permanent resident on the electoral roll 'regularly' throughout the year, then the owner will be fined £60,000. Owners who are fined would be obliged to provide details of things like energy bills in order to prove that someone lived there.

The belief is that this would help to bring more homes back into use. It could be the case that former buy-to-leave investors shift their focus and let their properties to tenants, allowing for an easing of the red-hot demand that has been characteristic of the market for a long time.

And an added bonus is that the council also plans to use any monies generated through fines to help improve affordable housing options around the country.

If the new moves from the North London council do prove to be worthwhile, it could represent a blueprint for tackling the empty homes issue across the capital for years to come.