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<p> </p><p><em>[Holding Reply: Tuesday 8 April 2014]</em></p><p><em>Action on empty
homes</em></p><p>The Coalition Government has a comprehensive package of policies
to help get empty homes back into use. They include:</p><p>· A £235 million empty
homes funding programme, which will deliver 12,000 homes from empty properties by
March 2015 – with apprenticeships on offer to make this happen.</p><p>· Rewarding
councils for bringing empty homes back into use through the New Homes Bonus – since
April 2011, councils have received over £2.2 billion for bringing over 93,000 empty
homes back into use, which they can then use to benefit the wider community.</p><p>·
Giving councils new powers to remove council tax subsidies to empty homes, and use
the funds to keep the overall rate of council tax down.</p><p>· Cancelling the last
Administration's Pathfinder programme which sought to demolish homes, instead focusing
on refurbishment and getting empty homes into use.</p><p><br> <em>The evidence base</em></p><p>This
approach is working. The number of empty homes has fallen year-on-year since 2009,
and at now at the lowest level since 2004. Similarly, the number of long-term vacant
properties has fallen by around a third since 2009.</p><p>I note that Islington Borough
Council's recent discussion paper on so-called “Buy to Leave” tried to use the electoral
roll as a proxy for measurement – yet many UK residents of foreign nationality may
not be legally eligible to be on the electoral roll, or it simply may not be a priority
for such individuals to register.</p><p>Moreover, in relation to London, I have placed
in the Library a table showing how the number of empty homes has fallen by 30 per
cent since 2009 and by 18 per cent in the last year, including a breakdown by London
borough, which broadly shows falls across both central, inner and outer London boroughs.
Islington has seen a drop in the number of empty homes of 26 per cent since 2009.</p><p>In
that context, the evidence that “Buy to Leave” is a widespread problem is weak. Fundamentally,
even where property is purchased by someone of foreign nationality, it will generally
be either occupied or rented out, generating an ongoing return for the investor. It
is not particularly rational for any investor not to rent out an unused flat and lose
rental income, given the strong demand for private rented accommodation, especially
in London.</p><p><em>The small number of foreign buyers</em></p><p>Even then, the
Bank of England recently estimated that foreign buyers represent just 3% of total
residential property transactions in London (Bank of England, <em>Financial Stability
Report</em>, November 2013). Knight Frank have estimated that between 85% and 90%
of new-build sales in Greater London are sold to domestic buyers, and there is no
indication of a shift towards higher non-resident purchases in the last two years
(Knight Frank, <em>International Buyers in London</em>, October 2013). Savills have
reported that the proportion of sales to overseas buyers in ‘prime' London markets
is no higher than it was in 1990. But they also estimate that, in 2012, foreign investment
helped to finance 3,000 new affordable homes and added a further 3,000 much needed
new homes to the market-rented sector (Savills, <em>Spotlight: The World in London</em>,
2013).</p><p><em>How foreign investment helps build new housing</em></p><p>Both domestic
and foreign investment in new housing has been helping to provide the finance needed
to build it, particularly in a global city like London. Without upfront investment,
financiers would not have released the cash needed for development to go ahead, and
building would have stalled. These new developments not only provide homes for people
to live and work, they also unlock associated affordable housing development. A good
example is the Battersea Power Station redevelopment which, having laid derelict for
thirty years, is now being taken forward thanks to the combination of private investment
from Malaysia and public infrastructure support from the UK Government. Both were
essential to move the project forward.</p><p><em>Marketing new build to local residents</em></p><p>I
would add that the Government has actively encouraged the property industry to ensure
that homes for sale are marketed in the United Kingdom, and not solely overseas. In
response, the Home Builders Federation announced in December 2013 a new industry initiative
which commits signatories to ensure that housing developments in London are marketed
in the UK either at the same time as, or in advance of, any overseas launch.</p><p>The
Mayor of London has also recently launched a Mayoral Concordat on new homes in the
capital, writing to key developers across the UK, asking them to sign up to commit
to selling new homes on every development to Londoners before, or at the same time
as they are available to overseas buyers. The Concordat is already supported by the
Major Developer Group, London First, the London Chamber of Commerce and the Home Builders
Federation and signed by fifty developers in London.</p><p><em>Tackling tax avoidance</em></p><p>Of
course, it is important that overseas owners of property pay their way. That is why
this Government has taken action to tackle tax avoidance by reforming taxation of
higher-value UK residential property held by non-natural persons, and also levelling
the playing field by introducing capital gains tax on future gains made by non-residents
disposing of UK residential property. Last month's Budget took further steps to discourage
the use of corporate envelopes to invest in high value housing to avoid paying tax.</p><p><em>More
new housing to buy and rent</em></p><p>As well as tackling empty homes, the Government's
long-term economic plan is increasing investment and building more homes. According
to the NHBC, in 2013, new housing registrations rose by 30 per cent in England on
the year before and registrations are the highest since 2007; in London, new registrations
rose 60 per cent, the highest annual total since their records began 26 years ago.</p><p>
</p><p> </p><p><strong> </strong></p><p> </p><p><strong> </strong></p><p> </p>
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