Even the prospect of collecting £10,000 a month is not enough to encourage wealthy owners to fill their vacant properties
There is something odd about Kensington and Chelsea. Across England, the number of homes left empty for six months or more fell by more than a third between 2006 and 2016, and in London it was down by a half, but in the west London borough it increased.
Rising house prices and rents, combined with changes to council tax rules, have made it unappealing for most people to keep a property empty. But even the prospect of collecting £10,000 a month from a tenant is not enough to encourage some of the country’s richest owners of empty homes to let people in.
For many years the rewards of simply owning a property on some streets in Kensington have been so great that letting it may have seemed an unnecessary hassle. In the 10 years to October 2016, house prices across Kensington doubled to an average of £1.2m, according to Land Registry data. In Brompton and Hans Town, the ward with the most long-term empty homes, prices rose by 312% between 2004 and 2014.
In most markets, increasing house prices lead to owners dividing up properties to make money – several flats are typically more lucrative than a single house – but a report for the Mayor of London two years ago found that in Kensington and neighbouring Westminster “deconversions” had outstripped conversions; multiple homes were being knocked together to form mansions. Normal rules do not apply at the top of the market.
Yet more were apparently only being used as boltholes for when their wealthy owners were in town; some of the capital’s most expensive properties in its most exclusive locations were being occupied for only a few weeks at a time and staffed by concierges.
In the face of such wealth, attempts to penalise owners of unoccupied properties lack teeth. Since April 2013, councils in England have been allowed to charge a premium of up to 50% on council tax after properties have been left empty for two or more years.
In Kensington and Chelsea it means the owner of a band H property – any home that was worth more than £320,000 in 1991 – would face a surcharge of just over £1,000 this year. Since April, councils in Wales have been allowed to levy a 100% surcharge, but a doubling of the bill is unlikely to move a millionaire to action.
Some councils have been using compulsory purchase orders to turn properties back into homes. But the process can take two years from start to finish and result in a public inquiry before matters are settled. Sometimes the threat of a CPO or an empty dwelling management order is enough to prompt a homeowner into action, but not always. In Islington, planning permission for new developments now includes a threat of action by the council if the properties are left unoccupied after purchase.
The housing charity Shelter says it is “deeply frustrating” that any houses are sitting unused. But its interim chef executive, Graeme Brown, adds: “While it’s vital that councils have the tools to identify and bring homes left empty for no good reason back into use, we need to remember that even filling all the country’s empty homes would not be enough to end our housing shortage.”
That’s certainly true in Kensington and Chelsea where, as of 1 April 2016, there were 2,753 households on the council’s housing waiting list and 1,652 empty homes listed. But it would be a start.