London's Zombie Homes
LONDON - When it comes to property and the lack of it in London and in other parts of Britain frustrated buyers looking to get on the property ladder are rightly fed up with the situation. In London almost 57,000 homes are vacant. The key problem experts say is the practise of buy-to-leavescheme where buyers purchase the property and leave it empty rather than using the space for rentals. By not renting the investor, many from overseas, does not have to comply with local regulations to allow people to live in it. The hope is to re-sell the property in the future for a good financial windfall.
Another source some say accounts for this issue is the misuse of Airbnb. Data at Airbnb shows that 64% of the available apartments and homes are for short term leasing for more than 90 days of the year which is said to be a violation of local London planning restrictions.
In research conducted by Transparency International UK there are 39,353 anonymously owned homes-thats just in the London area. To make the situation worse most of these homes are empty and many are thought to have been bought with less than ‘clean’ funds from overseas buyers. As a result these empty homes have a negative impact on communities as they begin to degrade because of lack of maintenance and wreaking havoc on local prices. Central London is reported to have the highest concentration of these properties at 12,202 in Westminster. The homes are hardly modest as many of the properties involve entire city blocks.
Former Prime Minister David Cameron called for an end to the practise of anonymous ownership in 2015 in a speech at the Lee Kuan Yew School of Public Policy. In his speech PM Cameron stated:
“The corrupt, the criminals, the money-launderers – they need anonymous company structures to hide, to move and to access their money. So by lifting off this shroud of secrecy we can expose wrongdoing and dissuade others from going down the same path.” He did clarify “the vast majority of foreign-owned businesses that invest in property in the UK are entirely legitimate and proper, and have nothing at all to hide. They are welcome in Britain.”
Many hailed the speech for addressing the issue but they also say that little has changed.
What To Do?
The Residential Landlords’ Association has entered into the issue by recommending that all of London’s boroughs find small, unused public sector plots of land that can be used to create up to five units per section for new homes to let. The idea is that these small plots of land are not interested by the large scale property developers and thus should be used for smaller more affordable housing which is in short supply. By leasing out these small parcels to small home builders will help future residents and remove from the area blighted and derelict properties.