Thursday, 9 February 2017

As expected.

From the BBC:

The housing market in the UK is "broken", according to the government and more homes are needed to cope with demand.

So why don't we use all those properties lying empty across the UK?

In some places in the UK, whole streets are empty because the area is no longer somewhere people want to live. John Bibby from the charity Shelter explains that this is usually for economic reasons, such as local industries closing down.

The potential council tax on such homes, where the location value is nil, is clearly too high. In marginal cases, an exemption from council tax (and business rates) might be enough to tempt people back.

The key to rejuvenating an area has been observed time and again. Get a load of artists, musicians, craft brewers and specialist shops to open up, tempted by low rents and no taxes, then sit back and wait as it becomes 'cool', then higher earners move in, the little shops get replaced by High Street chains etc ('gentrification'). At this stage, the council can re-impose council tax and business rates, the artists and small shopkeepers are priced out anyway (or cash in and sell up), move somewhere else and start again.

Buy-to-leave is becoming a problem in inner cities, particularly London.

Wealthy investors from outside the UK buy homes in new developments, with no intention of living in them or renting them out, simply as an investment opportunity. The estate agent Savills estimates that two-thirds of foreign buyers are investors.

However some local authorities have attempted to clamp down on this with some success, by charging extra council tax on homes left empty for more than two years. In the borough of Camden in London this tactic has reduced the number of empty properties by 40%.

That statistic seems highly questionable to me, but let's take it at face value. In these areas, council tax is clearly too low. Bump it up and you get fewer vacants.
If you replaced council tax, business rates and Stamp Duty Land Tax with straight Land Value Tax (just for starters), all this would happen automatically of course. Having a Citizen's Income would give low-earning artists, musicians etc an extra push to move there; they can merrily do their stuff without any hassle from the social.


Lola said...

CI would also help 'low earning' wealth creators to 'move there'. Even better than artistes etc. IMHO.

And as LVT is a %age on a moveable feast, when properties are abandoned they immediately get to 0% LVT. All you have to do is to track rents and selling prices. I mean, how hard can it be?

DBC Reed said...

They're very keen on the artists and creatives to revive run-down areas in the States. Some ridiculous situations arise where efforts are made by strait laced crackers in the sticks to round up homosexuwells.

Steven_L said...

If you replaced council tax, business rates and Stamp Duty Land Tax with straight Land Value Tax

Believe it not (and I dunno if you noticed) BE and ND over at C@W appeared to have started to agree with you the other day. I asked them to clarify if they were agreeing with your and they went silent on the matter. Other than BE calling you a 'fanatic' and an 'extremist' that is.

Bayard said...

"Buy-to-leave is becoming a problem in inner cities, particularly London."

I fail to see why this is a problem. If the landowners want to forgo the income they might receive from their properties, that's their business. As Mark points out, as far as the LA is concerned, it's not a bug, it's a feature. There's obviously room to increase the Council tax, plus they get their Council Tax and there are no bins to collect etc.

Mark Wadsworth said...

L, if one building is left empty, no LVT reduction, only if people abandon the area en masse. If there are enough empties, then people don't want to live there any more. Humans are actually gregarious animals, on the whole.

DBC, agreed, Hebden Bridge was famously once "the lesbian capital of the UK" and now it is apparently gentrified.

SL, ta for update. BE and ND are too intelligent to keep up the Homey pretences for ever, sooner or later the LVT penny will drop. I fear that CU himself is too blinkered.

B, a cynical council would bump up the council tax just to the level where it starts to have any effect. Maximise revenues and no annoying people to demand services.

Bayard said...

Mark, your cynical is my pragmatic.

Mike W said...

You have to admit this HG/LVT/CI framed thinking above is fantastic stuff. At the other end of our doubters to steven L post above: Even otherwise useless, crusty old Maxist hippies, with three strings on a banjo, could actually contribute to their local community beyond a demo.If they could just master their stage act or innovate in a productive area. Tie dye T shirt anyone? Just like 1967 to 1984 again. But no, raising real wealth and creating happiness within a functioning Democracy would never be an objective: just a fake demand, before the revolution :(

Mark Wadsworth said...

MW, ta, yes, I can put a right wing spin on lvt/ci as well if needs be.

ThomasBHall said...

"Without any hassle from the social"- Am I the only one to find Mark using this turn of phrase funny? ;)

@Mike W- yes it is fantastic stuff- although we all no why our deal leaders don't like it. It a) makes the need for invasive government a lot smaller, and b) Makes it impossible to farm tenants for massive personal gain

Ben Jamin' said...

C @ W ?

what's that?

Mark Wadsworth said...

BJ, a blog called Capitalists @ work aka CityUnslicker.