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Recent data from councils shows that the number of long-term vacant homes in London has risen by nearly 25% in the last three years, and is at its highest level since 2011. What is driving this, and what steps can you take to bring homes back into use?
Given the capital’s chronic housing shortage it is concerning to see an increase in the number of empty homes in London and while I do not have specific powers to bring empty homes back into use many councils are working hard to do just this. Unfortunately, the tools available to them are limited.
Councils can use Empty Dwelling Management Orders, known as EDMOs, to take over management of unoccupied homes and bring them into use as rental properties. My London Plan and London Housing Strategy outline my support for local authorities that wish to use these powers. Since 2012, the Government has restricted the circumstances in which EDMOs can be used. A home now has to be empty for two years rather than six months before an EDMO can be issued and an owner has to have three months’ notice. This has significantly reduced the effectiveness of EDMOs.
Councils can also levy a council tax premium on empty homes. The Government has increased this premium last year. However, it still does not go nearly far enough to disincentivise owners from leaving properties empty. Given the low levels of council tax as relative to property values, the premium is rarely high enough to have an impact. Band A, B and E properties in Westminster which have been empty for two years would need to pay only £529 extra even if the property is worth millions. That is why I have called on the Government to give councils themselves the powers to set the premium level.
We know there are different reasons for homes being empty. I have asked my team to commission research into definitions and data on empty homes to better understand this issue and ensure any future policy interventions are underpinned by strong evidence. In the meantime, I will continue to do all I can to support councils to tackle this issue and the wider housing crisis.
Thank you, Mr Mayor. One of my own local authorities in my constituency, Greenwich Council, is now consulting about introducing a 200% council tax for homes that have been vacant more than five years. Clearly Government wants to do something about this but this problem is increasing, as the original question said. Is there a case for even further action? Both the previous Mayor’s Finance Commission and your Finance Commission highlighted this as a problem.
Is there an issue about definition and the self‑reporting here between empty homes and derelict homes? Different strategies are required for both. Is there something further that we should be considering around that? Is there something jointly we can say to Government and say, “Is there a new initiative?” One of the arguments I am unclear on, but, should we ask for further devolution around the council tax and do a London-wide issue with much greater, concerted action with the range of tools that we have to try to break this issue down further?
Sadiq Khan (Mayor of London): Absolutely. You referred to, rightly so, the previous Mayor’s London Finance Commission report, and I commissioned another London Finance Commission report with the same team that Boris Johnson [MP] used. We need far more devolution, fiscal devolution as well, but also I trust councils ‑ you mentioned your council ‑ who know their communities far better. Definitions aside, councils often are not investing the staff, for good reasons, in trying to find empty properties because even with a 200% premium that is not a lot where you bear in mind the equity value and how much it affects a property owner, particularly an absentee landlord who lives overseas. It is a conversation we will have with this Prime Minister in relation to the London Finance Commission. Also, I am not asking for powers for myself and City Hall; I am saying, “Give councils this power to take action”.