The housing crisis and building the wrong kind of housing
I titled my little piece today for empty homes tell us about the housing crisis. so a few headlines on the screen there that stem from some of our work over recent years lots of numbers being thrown around. I quite like the one about Home Building being at the 30-year high but empty home is showing it’s the mankind I often say that one of the big problems with housing policy these days is we’re building the wrong housing or the wrong kind of housing.
We’re building far too many properties that are aimed at a higher income or some people sometimes called luxury into the market and we are not building enough social and genuinely affordable housing.
That might seem like a rather obvious thing to say but I probably should tell you how our work in empty homes kind of conjuncts with this if you like or how we came across it.
The phenomenon of buy-to-leave properties
Some years ago we were commissioned to look at a phenomenon called buy to leave property and by to leave it’s a kind of phenomenon that we associate perhaps with towers of luxury flats in London you’ve probably seen similar ideas when you look at a big new development and you think, you know there’s lots of development happening. We’ve still got a shortage of housing and then you look at these developments and they don’t look very occupied!
We were commissioned by a charity of the trust in London to and we asked to look into what was called the buy to leave and what was happening to these houses and clearly in the property market for example like in London some of this stuff is ending up being bought by people who are trying to keep their either illegitimately or ill-gotten games safe from you know various various foreign governments they might want to keep it safe from, whether it’s Russians or the Chinese or whoever it happens to be. When we looked at it we found that wasn’t really the major issue.
There was much more housing going In other directions that wasn’t housing anybody, was remaining essentially empty it’s always recorded an official statistics sometimes recorded in ways not make it obvious it’s empty and very much below the radar!
The issue of empty homes in the UK
So when you look at basic statistics on empty homes you’ll find that they’re about quarter of a million empty homes in the country, that sounds like an awful lot and it is quite a lot although the developer lobby will always tell you “but it’s a small number by International comparisons”.
Then again you know I think as we move towards the Quest for Net Zero we shouldn’t really be in the business of trying to solve our housing crisis by making sure that 10 percent of our homes were empty, Not least when a surprisingly large percentage are empty already!
That statistic is like the ones that record as long-term empty there are a whole host of other types of empty home. When you look beyond that into the deep statistics you pretty rapidly find that.
Even without getting into the issue of second homes that don’t have any Primary Residential use, I know that’s a big issue around here as it is in many Coastal communities you pretty rapidly get to 653,000 homes that no one’s living in. Then the next part of the story is if you like are the so-called second homes…
What I think is interesting about government statistics on housing is that there’s no such thing as a third home, you can have as many second homes as you like a second home just a furnished home with No one living in it.
Second homes and short-term rentals
Looking into this kind of an area of second homes we started increasingly to look at the different ways in which people can make money from housing without actually having any residence and obviously one of the most significant of these which is probably I’m sure very significant in Brighton Hove is through rental on the short term letting Market through airbnbs because this area is almost completely unregulated.
In the UK or certainly in England actually because there is regulation coming in, quite forceful regulation in Scotland, and some very acute new policies coming in Wales as well. But certainly in England it’s completely unregulated and it’s essentially it’s a it’s a very easy way of making quite significant amounts of money from homes as they’re called, that don’t house anyone.
Some mapping for us from a nice website called airdna.org, which allows you to look at how many airbnbs there are in your area and how many of them are what we report entire home rentals or whole home rental, and hotel rentals are significant because the sort of Mythology of Airbnb is mythology about hosts, but increasingly people are investing in Airbnb almost the way they’d invest in a commercial property.
The home is managed by another company by another Middleman they may have numerous listings on Airbnb and essentially they’re just indigenous investment property this is essentially property being sucked out of the use. So this is how we got involved with AirBNB, how we kind of got into looking more and more at Airbnb and obviously since then we’ve been involved in a number of national coalitions on work to push AirbnB.
Approaches to regulate Airbnb around the world
We’ve been working with you know in Parliament and on select committees and all kinds of stuff like that, but probably the basic way that we need to address this, in this kind of context is to think about or be a sensible way for Airbnb to be regulated in your community. There are lots of very valid approaches around the world you know very straightforward licensing controls that have been applied in cities like Barcelona.
Various total bans in some areas that have been sort of experimented with an Amsterdam and they’re now being experimented in Edinburgh. So yeah there are very practical Measures people put in place.
I mentioned the Welsh legislation which is coming through a few minutes ago. What wales have done is they’ve actually created three separate multiple use classes of property for residential homes and they’ve said when you get planning permission for a house or your house is at default a normal Primary Residential home, If you want to change its use to a short-term let also a second home which isn’t going to be occupied and may even not be that.
You have to apply for a change of use! This is something that I think is probably kind of the best possible solution you can get to how you control and regulate Airbnb on a local level because that means the community can make its own decision, they can decide for example how important their tourist economy is.
When a developer comes through the planning application they might even apply to build something which is specifically for that market but then they can make a rational decision about it. The problem that we have at the moment is that there are lots and lots of uses of our housing over which we have no democratic control councillors are asked to give planning permission for homes and then mysteriously they find that the number of players they’re given Planning Permission for, or a number of homes that are meant to be contributions to social housing, don’t happen.
They find that even the normal Market sale items as they refer to don’t end up being sold on the open market it’s quite common for 20 percent of the development to be sold off plan, into an international market before the houses are actually being built or the flats are actually built. So you get this kind of degradation of the amount of stocks and I suppose that was the reason really what we we started off with this work on the on buy to leave.
Practical measures for councils
There are limited powers that councils have, the trouble is there are endless obstacles put in their way. when the supposedly very powerful empty dwelling management order legislation was brought in, something that was drafted by the last Labor government certainly and brought in by the subsequent coalition Lib Dem government, it was immediately eviscerated! You know it was made extremely difficult to get an empty dwelling management order.
I imagine well it sounds like a great idea in theory it means that the owner is not bringing their property back into use or just not-responding to the council and it’s been empty for a period of time originally gave me six months, it’s now two years.
Then the council can in Theory step-in and do the property up, rent it out for a seven year period and the recoup costs from the rental and anything left over would be given at the end of the period to the owner unless the dwelling order is renewed.
So in theory you know they seem a very sensible piece of legislation, in practice there are maybe a hundred or a couple hundred of them granted every year, some years it’s less than that because that Conservative/Liberal Coalition that brought it in, immediately as I say eviscerated that legislation, they put all kinds of obstacles in their way, the most obvious one being that the council have to prove to a property tribunal with the household was causing social behaviour and criminal activity, so it was a well-looked after empty home, just locked up as someone’s investment. Couldn’t do a thing about it!
My favourite people’s quotes on this incidentally Tory Council of Kensington and Chelsea you might think that’s an odd thing for someone who’s involved in the housing campaign but the only reason I do is because they have 10 000 of these and just I think the tour we take more than getting the Tories to sort of hit them with if you like.
So we are always very keen to get the Kensington & Chelsea Tories complaining to the Tory government about how they’d like to have stronger powers on this. That’s probably a reasonable point to get to if you like that’s where we came at it from, we came at it from what is sucking the housing out of the housing stock? What’s preventing housing getting into use? What’s reducing housing available?
And yeah clearly I think you know Airbnb is a big factor particularly in communities like the one here.
The other major factor of course we’re not building enough housing on the right site for people who most need it, which is genuinely important social housing.
— Chris Bailey Speech Concluded —