Kensington’s empty homes show why ownership must be transparent-Rebranded

by | Sep 26, 2017

There’s something deeply sad about the words “empty home”. The idea that a house can belong to someone yet remain empty for years, particularly in London’s overheated property market, goes to the heart of our current housing crisis.

The extraordinary revelations about the owners of empty homes in Kensington and Chelsea shine a light on a very modern set of problems – the emergence of offshore property speculators and global elite who have ceased viewing houses simply as places to live in, and started seeing them as an investment asset. But they also speak to one of the oldest secrets in the country, one that goes back to the Domesday Book – the question of who owns England.

The problem of empty homes in Kensington has been known for some years, but it took the Grenfell Tower disaster to bring it into national focus. With hundreds of survivors still waiting to be rehoused, there have been repeated calls for the council to make better use of the large numbers of empty properties in the borough.

In 2015, Kensington council published a report on the “ghost mansions” appearing across the borough, even mapping the location of 941 of them. Official government statistics from earlier this year put the total number of empty homes in Kensington and Chelsea at 1,399. This week’s figures show a considerable rise, with 1,652 properties deemed empty. What’s never been revealed before was the identity of some of the owners of these empty properties. The data obtained by the Guardian, which we’ve been helping to analyze, shows two particularly significant groups of owners: the rich and powerful, and a multitude of mysterious offshore firms.

Those in the first group are invariably rich enough to own multiple homes, wealthy enough to leave one of them empty for years and not deterred from doing so by special council tax bands set 50% higher than normal rates. This “empty homes tax”, introduced in recent years by the Treasury, is supposedly punitive – but in fact is pitiful. For the very well-off absentee owners of multi-million-pound luxury properties, adding a few hundred pounds to their council tax is little incentive to increase their levels of occupancy. There has been no revaluation of council tax bands since 1991, and the tax now bears no relation to actual property values. Reform is urgently needed; perhaps a switch to a land value tax, reflecting the underlying location value that property owners do nothing to improve upon, but benefit from in rising house prices.

For the second group, the offshore firms, the identities and motives of the ultimate owners are inherently difficult to ascertain. Use of offshore company structures isn’t illegal, but raises the question: what does the ultimate beneficiary have to gain? Registering companies in offshore jurisdictions such as Jersey or the British Virgin Islands offers two obvious enticements: lower tax, and the ability to conceal the identity of the owner – with far less public scrutiny and reporting of corporate activities.

What we do know is that London in general, and Kensington and Chelsea in particular, have been hit by a rash of offshore firms buying up property in recent years. Private Eye’s map of land and property owned offshore shows that large swaths of the borough and of the exclusive Hans Town ward especially, now lie in the hands of overseas companies. At least 100 empty properties in the list revealed this week are owned by overseas and offshore firms.

Earlier this summer, the National Crime Agency warned: “The purchase of property in the UK, in particular within the London property market, through offshore companies presents a significant money laundering risk”. There is no evidence to suggest that offshore companies are engaging in this in Kensington and Chelsea. It’s clear, though, that these risks could be better assessed in other cases if there was more public information on offshore firms. Yet no government data on overseas ownership has been released since 2015; and a register of the beneficial owners of overseas companies, announced to great fanfare by David Cameron, has still not appeared.

But empty homes and offshore ownership are only the most egregious examples of a much bigger issue. The whole subject of land and property ownership in the UK remains taboo. For centuries, property owners have dissuaded the British government from publicly mapping land ownership in the manner of the French cadastre registers brought in under Napoleon – systems freely accepted today in many European nations and US states. Yet who owns land and property, and how fairly it’s shared out, has a huge impact not just on the cost and availability of housing, but also on how we farm, plan our cities and protect nature.

It’s for this reason that a year ago we set up an investigative blog, England? Looking to these questions. Using available data, freedom of information requests and GIS mapping, we’ve so far mapped about 10% of the owners of the country. Later this year, we hope to add another large tranche of landowners to our map when the Land Registry finally releases its corporate and commercial data set showing what UK companies own – after years of cajoling by campaigners. Even then, however, we anticipate that the ownership of about two-thirds of England and Wales will remain hidden – much of it held by huge inherited estates veiled behind the cloak of family trusts.

We don’t have all the answers to the housing crisis. But we do know one simple measure councils and the government should undertake to improve things: increase transparency, so that more people know what’s going on. Shine a light on offshore companies by demanding they reveal their ultimate beneficiaries. Reveal, as a matter of course, who owns empty homes. And open up the Land Registry so that we can all see who actually owns our country.

Courtesy of Theguardian .comand credited to Guy Shrubsole and Anna Powell-Smith

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