Dr Emmanuel Igwe is lead economist at the Prosperity Institute.
Kicking off the Labour Party Conference in style, the Government announced an enticing policy that would certainly whet the appetite of the Labour faithful. Councils would be allowed to take over homes that have been unoccupied for more than six months – down from two years – and fill them with tenants for up to seven years. Who could say that the Prime Minister is not doing his best to avert the housing crisis?
It’s obvious what the appeal is here. Latest figures from the MHCLG – Ministry of Housing, Communities and Local Government – reveal that over 370,000 homes in Britain have been unoccupied for at least six months, while there are approximately 134,000 households living in temporary accommodation – which consist of 177,000 children. One may read these stats and conclude that any policy which might reduce homelessness is worthwhile. However, they would be mistaken.
For a start, as any YIMBY evangelist would tell you, Britain is short on homes because it is not building enough. The housing crisis is not about empty homes. The Labour Government has indicated some understanding of this problem, promising to build 1.5 million homes during the current parliamentary term, a target similar to the pledge the Conservatives made in its 2024 manifesto. So far, approximately 438,000 homes have been built in the current parliamentary term. If this trend continues, the Government will miss its target by nearly half a million by 2029. Housebuilding completions last year were the lowest in a decade, and it should give cause for concern.
Looking at the data reveals how impractical this policy idea is. In England there are 303,000 empty houses – accounting for 1.2 per cent of total housing; a number that has remained unchanged since 2021. In Scotland and Wales where there are higher vacancy rates (1.6 and 1.5 per cent respectively), there are more incentives to support owners with advisory services rather than punitive measures. Interestingly, these houses are mostly far from where the need is. They are mostly a mix of high-value investment properties and low-end, low-demand terraces. Most of whatever is left is caveated by a string of exemptions that safeguard people in long-term care, the bereaved, and places in active listings.
We need to disavow ourselves of the notion that the council is a prudent steward of the estates it owns, contrary to the Prime Minister’s singling out of private landlords in his conference speech. The latest Housing Ombudsman Annual Complaints Review found that local councils were at fault in 72 per cent of social housing repair complaints. This number rose to 75 per cent for damp, mould and leaks, and 80 per cent for broken windows. Handing more housing to a landlord that is proven to be incapable of managing its current stock is like building a second storey on a house with crumbling foundations.
So, understanding the impracticality of this policy proposal, what then, is the appeal? Quite evident here is the obvious class politics at play which treats owning property as a privilege that needs to be curtailed, not the symbol of aspiration that should be encouraged. It is curious also that on this same weekend, the pitch for the ‘Your First Home’ scheme is that it targets those who cannot access the assistance of “the bank of mum and dad”. This mish-mash of policy proposals creates a bizarre paradox where the playing field is levelled for the working class while hindering the asset-building that allows families to attain financial independence in the first place.
At the start of the Second World War, the Emergency Powers (Defence) Act was passed, which granted local authorities the right to requisition empty homes to shelter evacuees and bombed-out families. It would take two decades before all properties were returned to their owners. More recently, the Empty Dwelling Management Orders (EDMOs) – from which these powers are derived – was extended in 2012 to 2 years in a bid to “protect the civil liberties” of homeowners. Today, these protections are being dismantled as the criteria for empty home takeover orders relating to anti-social behaviours are being removed. This is a classic case of regulatory creep that would only see the state gain further ground that it may never give back.
When people trust that their property would be secure, they would build, improve and let homes. If this trust is undermined, fewer homes would be built, let or brought back into use. If the Government wants to reduce homelessness, it should look towards scrapping the Stamp Duty and ease up planning regulations. You cannot seize someone’s housekeys and call it ‘housing policy’. It just shows that the Government is running out of means to boost housebuilding.
Dr Emmanuel Igwe is lead economist at the Prosperity Institute.
Kicking off the Labour Party Conference in style, the Government announced an enticing policy that would certainly whet the appetite of the Labour faithful. Councils would be allowed to take over homes that have been unoccupied for more than six months – down from two years – and fill them with tenants for up to seven years. Who could say that the Prime Minister is not doing his best to avert the housing crisis?
It’s obvious what the appeal is here. Latest figures from the MHCLG – Ministry of Housing, Communities and Local Government – reveal that over 370,000 homes in Britain have been unoccupied for at least six months, while there are approximately 134,000 households living in temporary accommodation – which consist of 177,000 children. One may read these stats and conclude that any policy which might reduce homelessness is worthwhile. However, they would be mistaken.
For a start, as any YIMBY evangelist would tell you, Britain is short on homes because it is not building enough. The housing crisis is not about empty homes. The Labour Government has indicated some understanding of this problem, promising to build 1.5 million homes during the current parliamentary term, a target similar to the pledge the Conservatives made in its 2024 manifesto. So far, approximately 438,000 homes have been built in the current parliamentary term. If this trend continues, the Government will miss its target by nearly half a million by 2029. Housebuilding completions last year were the lowest in a decade, and it should give cause for concern.
Looking at the data reveals how impractical this policy idea is. In England there are 303,000 empty houses – accounting for 1.2 per cent of total housing; a number that has remained unchanged since 2021. In Scotland and Wales where there are higher vacancy rates (1.6 and 1.5 per cent respectively), there are more incentives to support owners with advisory services rather than punitive measures. Interestingly, these houses are mostly far from where the need is. They are mostly a mix of high-value investment properties and low-end, low-demand terraces. Most of whatever is left is caveated by a string of exemptions that safeguard people in long-term care, the bereaved, and places in active listings.
We need to disavow ourselves of the notion that the council is a prudent steward of the estates it owns, contrary to the Prime Minister’s singling out of private landlords in his conference speech. The latest Housing Ombudsman Annual Complaints Review found that local councils were at fault in 72 per cent of social housing repair complaints. This number rose to 75 per cent for damp, mould and leaks, and 80 per cent for broken windows. Handing more housing to a landlord that is proven to be incapable of managing its current stock is like building a second storey on a house with crumbling foundations.
So, understanding the impracticality of this policy proposal, what then, is the appeal? Quite evident here is the obvious class politics at play which treats owning property as a privilege that needs to be curtailed, not the symbol of aspiration that should be encouraged. It is curious also that on this same weekend, the pitch for the ‘Your First Home’ scheme is that it targets those who cannot access the assistance of “the bank of mum and dad”. This mish-mash of policy proposals creates a bizarre paradox where the playing field is levelled for the working class while hindering the asset-building that allows families to attain financial independence in the first place.
At the start of the Second World War, the Emergency Powers (Defence) Act was passed, which granted local authorities the right to requisition empty homes to shelter evacuees and bombed-out families. It would take two decades before all properties were returned to their owners. More recently, the Empty Dwelling Management Orders (EDMOs) – from which these powers are derived – was extended in 2012 to 2 years in a bid to “protect the civil liberties” of homeowners. Today, these protections are being dismantled as the criteria for empty home takeover orders relating to anti-social behaviours are being removed. This is a classic case of regulatory creep that would only see the state gain further ground that it may never give back.
When people trust that their property would be secure, they would build, improve and let homes. If this trust is undermined, fewer homes would be built, let or brought back into use. If the Government wants to reduce homelessness, it should look towards scrapping the Stamp Duty and ease up planning regulations. You cannot seize someone’s housekeys and call it ‘housing policy’. It just shows that the Government is running out of means to boost housebuilding.