Using the long arm of the law to force-fill empty homes is getting very vogueish. From the far left to the Tory back benches everyone seems to be getting on board with the idea.
The Government is legislating to permit greater tax surcharges on empty homes. The Resolution Foundation is arguing for more active steps to reduce empty houses and, more ominously, “over-housing” (who gets to judge? Who checks?). Last year Jeremy Corbyn encouraged the physical occupation of empty homes in West London.
But is force-filling empty homes really going to help solve the housing crisis?
The evidence suggests not. The simple fact is that in comparative terms Britain has very few and a systemically falling number of empty homes. In 2016, there were just over 200,000 in England. That represents a 37 per cent fall since 2004, when there were almost 320,000. Most are in the wrong places.
And, even if they weren’t, they still only represent about nine months’ worth of the government’s annual target. The reduction in empty homes is hardly surprising. After all, in an era of rising prices, why leave a valuable asset empty?
The number of empty homes is also lower than most other countries. A pan-European comparison produced by The Guardian was imperfect. For the UK, it used short term vacancy numbers (this includes homes left empty briefly when someone moves house which is hardly relevant). Nevertheless, it showed that Britain has comparatively fewer empty than almost anywhere – half that of Germany’s, less than a third that of France’s, just over ten per cent of Ireland’s.
This is not to say that we should not encourage empty homes to be “brought back into use”. The charity Empty Homes does brilliant work facilitating the reuse of homes left empty in deprived communities. This can have real benefit not just for those housed in them but also for the wider neighbourhood.
Nor should empty or second homes be advantageously taxed, as they used to be. The tax system should be as simple as possible.
It is also fair to say that there seem to be some recently-built, very high value, super-dense, high-rise and easy to buy-to-leave schemes which have indeed, in part, been, bought and left. It is hardly surprising that this causes resentment among those priced out of the market.
But focusing on empty homes is not just missing the point, it also risks giving succour to those who continue to argue that the reason for the housing crisis is not lack of supply but the nature of demand. This is just fanciful. Sure, Help-to-Buy has, idiotically, pump-primed the market. And this should be stopped.
But as the comparative analysis in our new report, From NIMBY to YIMBY: how to win votes by building more homes shows, Britain has consistently had some of the lowest growth in housing stock over the last 40 years.
As a result we have one of the tightest homes-to-household ratios in Europe. In 2015 for every household in the UK there were about 0.99 homes. In other words very, very nearly but not quite enough homes to house every household. In case you are tempted to think “oh that’s very nearly enough”, bear in mind that the housing market is not one market but many multiple markets of different places, price-points and home sizes. A couple needing a flat in central Leeds won’t find a family home at a good price in rural Dorset much help to them. This is why countries need slightly too many homes in order to fit everyone in. We can’t plan our way to perfect housing hyper-efficiency.
The homes to household ratios in France is 1.18; in Germany it is 1.03. The simple European average is 1.12. Hardly surprisingly, 40 years of observably lower comparative house-building has left Britain with not enough homes to function efficiently or fairly. Overly-focusing on empty homes does not just distract us from the key problem. It also distracts us from the key cause of the problem.
If Britain has one of the tightest homes to household ratios and has built relatively fewer homes, it is worth asking: what is the cause of British exceptionalism? What is different about the British housing market and planning system to the approach taken in countries with less of a housing shortage?
Ask the question this way and quite a few left-wing and right-wing dogs simply don’t bark. Britain does not have less subsidised housing than most other countries. Nor does it tax property less. On the other hand the problem is not “too much planning”. It is planning complexity and unpredictability. There has always been some sort of regulatory involvement in how we build and use towns and cities – the Romans did it, so did the Anglo-Saxons, to say nothing of the Georgians.
If you don’t it like it, tough – I’ll build a tannery or a night-club next to you suburban home. But thanks, I suspect, to an unintentional alliance between planners (wishing to preserve professional discretion) and supporters of free markets (sceptical of all planning regulation), our system is now conceptually pretty chaotic.
It’s not just the green belt. Many other countries have their equivalents via urban containment policies – though they tend to be more flexible. It is the fact that in the UK decisions over a landowner’s right to develop have been handed to local councils, with uncertainty of what will be permissible via a discretionary planning permission process.
In most other countries planning is regulated with more predictability of what is, and is not, acceptable. There is just no concept of planning permission as we understand it. In fact, other than us, only Ireland even has planning permission. In much of the West as long as you are compliant with the local plan, you have an inalienable right to develop.
This predictability matters because the higher level of theoretical control and lower level of permitted clarity increases planning risk. This poses a major barrier to entry to smaller developers, self-builders and other third sector developers. It is no accident that the UK has a consistently more concentrated development sector with a systemically lower proportion of self-build and SMEs than most countries. Britain has a planning system in which each new site is contested.
The politics is “downstream” not “upstream”. This means nobody is quite sure what will end up being built on any site. This alarms and motivates NIMBYs, for whom uncertainty is crucial. But it also isn’t good for anyone who wants to build on land, including self-builders. More planning risk is however, in relative terms, good for larger housebuilders.
With their huge resources they are better able to take those risks. A less weird, unpredictable and high-risk planning process would be good for everyone. By all means take steps to help fill empty homes. But is a distraction from the real body of work that needs to be done.
