It’s well acknowledged across the political spectrum that the country is in the midst of a housing crisis, but very few are willing to countenance the idea that cracking down on second homes could be one the of measures used. In her fourth #ConterManifesto, Eve Livingston argues taxing second homes, removing loopholes for property moguls and giving the state the right to buy back empty properties are all steps to consider….
Of all society’s pressing crises of inequality, the housing crisis is arguably the most urgent and symbolic. Wander through almost any major city and find people sleeping on the pavements next to properties sitting empty and cold while they steadily tot up the wealth of their owners. Wander through many rural areas out of tourist season and find quiet towns and dark houses, waiting for summer when they will bustle again with transient families coming and going for a week at a time. A radical redistribution of homes could see everyone housed overnight with rooms to spare, but that’s a policy unlikely to make its way onto any manifesto any time soon. So what can really be done about the growing problem of empty and second homes?
The answer doesn’t lie in one single policy but in a number of changes which, enacted together, could serve to radically challenge the underpinning notion of the housing market: that properties exist as assets before they do homes. It might sound like utopia, but there can be little other choice in the fight between millionaires’ rights to accumulate wealth and the human right of every person to a home fit for habitation.
Empty and second homes are not the only cause of the housing crisis, but they are a huge and growing problem. Figures from the Resolution Foundation found that 1 in 10 people in the UK own a second home, while a research paper by the Scottish Greens states there are 105,000 unused properties in Scotland, equal to 3% of all dwellings in Scotland. The majority of those with multiple homes are based in the country’s wealthiest areas, while the proportion of empty properties is highest in rural areas with lower wage economies and a lower average salary.
There are many stories behind these statistics: buy-to-let landlords do and should shoulder a huge amount of responsibility in conversations about housing inequality, but these figures also – and primarily – include those with holiday homes and second properties acquired as investment, as well as those we may think about less in this context, such as families housing adult children in different properties.
Areas which have so far seen the most action on second homes have tended to be those known for their tourist trades: the first community in the UK to introduce what’s effectively a ban on second homes was Lynton and Lynmouth in Devon, with others following, such as in the high profile case of St. Ives in Cornwall, where the ban was challenged and upheld in the High Court.
This sort of outright ban on second home ownership might sound like a dream scenario to many on the left, but in practice it has mixed results. In England, these bans have been introduced through Neighbourhood Residential Plans at a local council level; the result is they only really have the power to address new build properties, and therefore stop non-local buyers from purchasing new builds but leave older properties (arguably those more sought over as holiday homes) unaffected. With new builds constituting such a small proportion of property overall, the policy has no effect on housing stock except to potentially disincentivise developers from building ‘affordable’ new housing and to push up the price of existing housing stock.
Similar results have been seen elsewhere: in Switzerland, a ban intended to address this problem in areas popular for ski tourism has resulted in the cost of primary homes increasing and the growth of the housing sector slowing down. And critics have warned of the dangers of simply transferring the problem to neighbouring towns without such bans in place.
The problem here is that bans of this nature attempt to make radical change within a free housing market which is governed by profit and growth: the ability of local councils to challenge free market economies head on – as is necessary for a true solution to the housing crisis – is incredibly limited. These efforts present new ways of thinking about housing and raise vital questions and challenges about the end value of local market land, the often negative impact of competition within the housing sector, and the ways in which current planning systems reward wealth accumulation over the needs of local communities. But the powers available within them often aren’t enough to secure the correct answers.
Instead, a combination of measures including taxation, planning and requisition may provide a more viable solution.
Firstly, second homes are currently subject to a number of loopholes which can result in their owners paying little or no tax in the local area in which they own. Second properties can currently be registered as holiday businesses in order to receive a discount of up to 100% on council tax, with the only criteria that they are advertised as available to let for a minimum of 140 days a year, but with no obligation to accept bookings.
Far from rewarding those who accumulate property, taxation should be used actively to disincentivise the ownership of multiple properties. Since 2013 in the UK and 2016 in Scotland, councils have had the right to levy full council tax on second properties rather than offering discounts as standard. Not only should every council abolish any discount, but a specific tax on the act of owning a home you don’t live in could discourage owners from leaving homes empty and generate revenue for house building, which is also urgently required to solve the housing crisis. In parts of Wales particularly affected by the holiday home industry, these are moves already being considered.
While planning decisions can traditionally be made on the basis of free market ideas about growth and profit, a requirement for second homes to be subject to planning consent could both tackle the problem itself whilst also reframing the role of planning around the needs of communities and citizens. Purchasing a property to leave it empty or rent as a business has a significant impact on local infrastructure, public services and community; this surely constitutes what’s known in planning terms as ‘change of use’ – from a home for families with roots in the area and who contribute to it in return to a shell which feeds off the best parts of a community while giving little back.
Finally, and perhaps most controversially, the right of the state to buy back empty properties at discounted prices in order to increase the affordable housing stock would have a transformative impact on housing and society. When Jeremy Corbyn made this suggestion in response to last year’s Grenfell Tower fire, it was condemned as equating to theft and punishing the wealthy – and yet there is comparatively little backlash when low-income council house tenants effectively have their homes ‘seized’ by property developers to make way for luxury flats, as happens on a fairly regular basis. The idea that requisition is justified when it generates profit but outrageous when it houses the homeless is a symptom of a broken economy which must be opposed and reversed.
Ultimately, the paradox when it comes to talking about housing is that the conversation often becomes about everyone’s right to own their own home, when it’s the concept of ownership that has led to this crisis in the first place. It’s simultaneously true that every single person should have a safe, comfortable, affordable home, and that the uneven accumulation of property is the single biggest factor preventing this from being the case. It’s on this basis that the left should propose radical solutions to the housing crisis without falling into the trap of fetishising ownership.
These possible solutions, then, only present opportunities to challenge one small corner of what’s ultimately a crisis about the purpose of our economy and the dangers of capitalism. But they do provide a context for starting such a conversation, whilst also genuinely tackling a sizeable symptom. Phrases such as ‘homes not assets’ and ‘a home for everyone’ sound uncontroversial and common-sense, but at their root they necessarily require a radical reframing of property and ownership. Clamping down on second and empty properties benefits individuals and communities in the immediate term, while opening up this very conversation for the long haul.