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You can find the current article at its original source at http://www.theguardian.com/commentisfree/2014/dec/08/islington-council-buy-to-leave-investors-uk-housing
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| Is Islington right to target ‘buy-to-leave’ investors? | Is Islington right to target ‘buy-to-leave’ investors? |
| (about 1 hour later) | |
| I know it is not currently en vogue to hold opinions that involve shades of grey, especially on political or economic matters, but part of Islington council’s solution to its housing shortage is an interestingly complex puzzle. The council plans to impose heavy restrictions on any new property purchased solely as an investment and left unoccupied, with punitive consequences if breached. | |
| The proposed measures go out to consultation today. They effectively boil down to conditions attached to new residential planning permissions, which will prohibit properties being left empty for more than a given period. They are intended to target the phenomenon of “buy to leave” – property bought to take advantage of London’s ever-buoyant housing prices, with no intention of it being occupied, either by owner or tenant. | The proposed measures go out to consultation today. They effectively boil down to conditions attached to new residential planning permissions, which will prohibit properties being left empty for more than a given period. They are intended to target the phenomenon of “buy to leave” – property bought to take advantage of London’s ever-buoyant housing prices, with no intention of it being occupied, either by owner or tenant. |
| Coverage of the scheme has, predictably, focused on its more attention-grabbing aspects, such as the threat of jail for those who do not comply. A range of measures – including fines, injunctions or even, ultimately, incarceration – are available for local authorities to seek against any party that persists in breaching planning regulations. Hyperbole aside, there is little doubt that the proposed measures are pretty draconian, arguably even illiberal. | Coverage of the scheme has, predictably, focused on its more attention-grabbing aspects, such as the threat of jail for those who do not comply. A range of measures – including fines, injunctions or even, ultimately, incarceration – are available for local authorities to seek against any party that persists in breaching planning regulations. Hyperbole aside, there is little doubt that the proposed measures are pretty draconian, arguably even illiberal. |
| On the other hand, the facts are quite startling. Islington council found that 30% of 2,000 homes built in the past six years had nobody on the electoral register, and that close to a quarter of homes in five of the newest residential developments appeared to be empty. According to research consultancy Molior, in developments of more than 20 units across London, over 70% of new-build sales in the £1,000-£1,500 sq ft range were to investors, with some “held as permanently available hotel suites” by the owners. A Battersea flat has recently made the headlines: it was bought for £1m in the spring, and is now on the market for £1.5m. It has not even been built yet. | |
| Perhaps a problem so pervasive does require unusually aggressive solutions such as Islington’s. | |
| Is what is being proposed a solution though, or merely a cosmetic exercise, designed to look enticing to voters, but in truth tilting at windmills? If the rules only apply to new homes, the concern is that this will merely make existing properties even more desirable, pushing their value further out of reach. Also, the proposals are ineffectual in dealing with vacant land – arguably, a problem even greater than a partly occupied development – and so may encourage the opposite of what Islington wants. | Is what is being proposed a solution though, or merely a cosmetic exercise, designed to look enticing to voters, but in truth tilting at windmills? If the rules only apply to new homes, the concern is that this will merely make existing properties even more desirable, pushing their value further out of reach. Also, the proposals are ineffectual in dealing with vacant land – arguably, a problem even greater than a partly occupied development – and so may encourage the opposite of what Islington wants. |
| Both objections can be countered with pragmatism: in tackling such a big issue, a council has to start somewhere; new planning permissions are the perfect instrument for fostering desirable behaviour. | Both objections can be countered with pragmatism: in tackling such a big issue, a council has to start somewhere; new planning permissions are the perfect instrument for fostering desirable behaviour. |
| “An Englishman’s Home Is No Longer His Castle”, bewails Tim Worstall, a Ukip bigwig who lives in Portugal. Planning law has long interfered with “English men” and their fictitiously absolute property rights. Almost anybody who buys a flat in a new development – usually a leasehold – does so with voluminous covenants and lease terms. It is called “sharing an island with another 64 million people” and it is perfectly sensible. If an Englishman bought an actual castle, they would probably find it to be listed and their property rights heavily interfered with. | “An Englishman’s Home Is No Longer His Castle”, bewails Tim Worstall, a Ukip bigwig who lives in Portugal. Planning law has long interfered with “English men” and their fictitiously absolute property rights. Almost anybody who buys a flat in a new development – usually a leasehold – does so with voluminous covenants and lease terms. It is called “sharing an island with another 64 million people” and it is perfectly sensible. If an Englishman bought an actual castle, they would probably find it to be listed and their property rights heavily interfered with. |
| Of course it is easy to condemn socialist, statist, Kafka-esque Islington for interfering. But if, as a thought experiment, we were to transfer the problem to a smaller, leafier, less metropolitan setting, it becomes a no-brainer. Suppose a Russian oligarch decided to start buying up investment properties in a picturesque market town and left them empty. Local shops and businesses started to close. The place turned into a ghost town. Would the local residents be right to demand limits on the practice and the local authority to intervene? Of course. It is absolutely, patently, squarely within the purview of planning law. | Of course it is easy to condemn socialist, statist, Kafka-esque Islington for interfering. But if, as a thought experiment, we were to transfer the problem to a smaller, leafier, less metropolitan setting, it becomes a no-brainer. Suppose a Russian oligarch decided to start buying up investment properties in a picturesque market town and left them empty. Local shops and businesses started to close. The place turned into a ghost town. Would the local residents be right to demand limits on the practice and the local authority to intervene? Of course. It is absolutely, patently, squarely within the purview of planning law. |
| Another criticism, however, might be more difficult for Islington council to answer. Why, in the country’s most densely populated council, and one of the richest, have so few new homes been built in the past few years? If Islington is serious about tackling its housing shortage, the council must be proactive about it. If it is unhappy about the way land is being developed, why don’t they take the lead in developing it, rather than selling it for a quick buck (or letting it be privately purchased), then quibbling over its use? And on an even larger scale, is the state doing all it can to encourage its citizens to disperse a little more widely than central London? | Another criticism, however, might be more difficult for Islington council to answer. Why, in the country’s most densely populated council, and one of the richest, have so few new homes been built in the past few years? If Islington is serious about tackling its housing shortage, the council must be proactive about it. If it is unhappy about the way land is being developed, why don’t they take the lead in developing it, rather than selling it for a quick buck (or letting it be privately purchased), then quibbling over its use? And on an even larger scale, is the state doing all it can to encourage its citizens to disperse a little more widely than central London? |
| Ironically, on the specific issue of empty homes, there was a practice that had developed naturally and acted as a perfect incentive to keep properties occupied. The state has mounted aggressive campaigns against it these past few years. Thousands of homes languishing empty might just be down to the success of such campaigns. That practice was squatting, of course. | Ironically, on the specific issue of empty homes, there was a practice that had developed naturally and acted as a perfect incentive to keep properties occupied. The state has mounted aggressive campaigns against it these past few years. Thousands of homes languishing empty might just be down to the success of such campaigns. That practice was squatting, of course. |