London council plans to fine “buy-to-leave” investors

London council plans to fine “buy-to-leave” investors

Islington Council plans to fine the owners of new homes left empty for long periods of time. 

Landlords who don’t live in a new build home, and don’t rent it to tenants, could be fined up to £60,000 under the plans which aim to clamp down on empty housing in the capital.

Islington Council says "buy-to-leave" homes – new homes that are sold as investments, often marketed off-plan overseas, and left to stand empty –  are rapidly becoming a problem in the borough, especially in EC1.

As many as half the homes in some recent developments in EC1 have no-one on the Electoral Roll, according to council data. This phenomenon has also been seen in other parts of central London, and in major new developments in the capital.

The council has said that new homes sitting empty represent “wasted” supply, making no contribution to meeting Islington’s need for new places for people to live.

The problem of new homes sitting empty is correlated with an influx of overseas money, which in turn pushes up prices and increases the affordability crisis in Islington.

The council has launched a consultation on a new discussion paper – Preventing Wasted Housing Supply – which considers measures to deal with the issue, including:

• requiring a financial contribution to be made where new dwellings are left unoccupied, to contribute to affordable housing elsewhere
• shifting the onus to the owners of new homes to prove they are regularly occupied, if the council suspects they are not
• exploring further the effects of overseas marketing campaigns on the market for new homes, and whether further action, such as marketing homes locally, is required

Cllr James Murray, Islington Council's executive member for housing and development, said: "In Islington, as across London, it's harder and harder for people to find somewhere they can afford to live. At the same time, expensive new housing is being built, often sold off-plan overseas, and then left to stand empty.

"It's galling for Londoners to see homes being sold overseas before they’re even built –  and it's outrageous for new homes to then stand empty in the middle of a housing crisis.

"In Islington we desperately need more affordable housing, and every new home should help meet our housing shortage. We cannot stand by as new homes sit there as empty, purely as investments, and so we are setting out our plans to end this."

Consultation has now begun on the discussion paper, which can be found online. It runs until 14 April.

It will be used to help inform a Supplementary Planning Document, to help guide new developments in Islington.

The measures proposed in the discussion paper would not affect existing homes, but would be applied to future developments.