Publisher Alabaster

Why Are There So Many Empty Luxury Homes In London?

The Belize building is located on London’s Old Street, one of the most expensive and fashionable districts in the United Kingdom.

An apartment there can cost more than the US $ 1.5 million.

And those who want to take one for rent, have to be prepared to pay about the US $ 3,000 per month.

But five years after it was finished, the building is half empty.

Local authorities confirm that 42% of the apartments in the building do not report a permanent occupant.

And officials blame a phenomenon known as “buy to leave.”

Wealthy investors, often foreigners, buy properties and leave them empty.

They do not even bother looking for tenants for their properties, says reporter Justin Parkinson of the BBC.

What is the logic?

The phenomenon of empty luxury homes contributes to a worrying trend in the United Kingdom. Although the country faces a severe housing deficit, in England alone, there are 610,123 vacant houses.

And, why would the owners have left those properties unused?

The mayor of London, Boris Johnson has criticized some owners for using houses as “gold bars in the sky,” but adds that imposing restrictions on investment in the city could be a mistake.

For most people, wasting the opportunity to collect massive amounts of rent money from their properties may sound like an expression of financial inconsistency.

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They Do Not Want “Second Hand”

But property expert Henry Pryor thinks differently. In fact, it ensures that the owners who leave their homes empty are being very calculating.

The cost incurred in leasing it, including the deterioration of the home, may exceed what is collected by the rent, he warns.

And, in the upper segment of luxury housing, many buyers are willing to pay more for the immaculate house.

“Some buyers do not want to live in a second-hand site; it’s the same as if they were buying a Rolls-Royce or an Aston Martin,” he says. “This applies even when they are buying a site that is five years old.”

Not all empty houses in London are luxury properties, explains the Empty Homes charity.

Many reflect everyday economic problems.

For example, the lack of money for the renovations that are required to rent the house.

Or when the property has been inherited by multiple owners, who need time to decide what to do with it, says Justin Parkinson of the BBC.

Immune to fines

Many warn of the adverse effect it has on the quality of urban life in an area when many homes are unoccupied.

Local authorities in England can charge an additional 50% in property tax to owners of empty houses for more than two years.

What is not necessarily going to convince the most affluent investors to act.

They also have the power to impose purchase orders on real estate.

For example, in 2009, in the very posh London district of Kensington, the authorities recommended the compulsory purchase of a house on a street where many properties are worth more than the US $ 1.5 million.

The measure was taken six years after the authorities were warned of a plague of mice in the area.

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