£123 billion of property is barely used in Britain as experts call for Empty Home Tax 

Building new homes is not the answer, says UCL

Housing worth £123 billion is barely used in Britain, researchers have calculated, and have called for a one per cent tax on second homes to dissuade people from keeping hold of mothballed property.

A new study by University College London (UCL) concluded that building new homes is not the answer to Britain’s housing crisis as they are likely to be bought up as second homes or investments in the most popular areas.

Researchers collected information from around one third of local authorities in Britain covering 40 per cent of the population and found nearly 340,000 homes that were rarely used.

The majority were in London and the South West and Kensington was found to be the worst, with £21 billion of underused property in the borough.

Around four in 10 people currently live in an area where the average value of barely-used homes is higher than those that are permanently occupied, suggesting that the most desirable properties are being bought for purposes other than use as a home, for example as investment opportunities or holiday homes.

Researcher Jonathan Bourne at University College London, said: “Some of the most surprising findings were the sheer value and quantity of low-use properties in some areas.

“The data shows that low-use properties are very concentrated in small numbers of desirable areas. In such cases simply building more homes is not going to solve the problem, as the issue is intense competition for property, not a lack of places to live.

“An empty homes tax may be more effective, with the potential to generate a not inconsiderable income for local authorities, whilst taxing people who are typically not eligible to vote in local elections, or encouraging them to rent out their properties.”

Buyers are being increasingly priced out of the property market and the average home and  average, full-time workers can expect to pay around 7.8 times their annual salary to purchase a home compared to 3.6 times  twenty years ago.

According to recent figures from the Office for National Statistics (ONS)housing affordability has worsened in 69 local authorities in England and Wales over the last five years, with over three-quarters of these being in London, the South East and the East.

Kensington and Chelsea was the least affordable local authority in 2017, with median house prices being 40.7 times average workplace earnings.

As well as a slowdown in wages, experts believe that the widening gap is fuelled by foreign buyers buying property for investment as second home ownership by British citizens in rural areas and tourist hotspots.

The data showed that the average low-use home was worth £363,000, some 18.5 per cent more expensive than the average home, at £306,000. But the researchers concluded that simply building more homes in the hope it would bring down house prices would not work in the most popular areas.

Instead they suggest an empty homes tax of one per cent would raise an additional £1.2 billion in taxes.