The Guardian's
exposé of the extraordinary state of 'Billionaire's Row' – The
Bishops Avenue in north London – is yet another reminder of just
how dysfunctional the UK housing market has become. Mansions worth
together around £350 million are lying empty (above), many decaying
into serious dereliction, whilst the government's 'bedroom tax' is
forcing large numbers of those at the other end of the 'property
ladder' to quit the capital, often leaving behind family, friends, schools
and job opportunities.
Boris Johnson's answer? To charge
owners of empty properties worth over £2 million a 50% Council Tax
surcharge. Or maybe 150%. The Mayor isn't very good on detail.
That should really hit the owners hard. The rate for the top Council
Tax band in Barnet is £2832.40, so the surcharge would be either
£1416.20, or £4248.60, depending on what he means. One of the
Bishops Avenue mansions, Dryades, until recently the property of the
Pakistan Minister of Privatisation (clearly a post with a generous
salary), was bought for £12 million in 2007 and, according to the
Guardian, is currently believed to be worth £30 million. That's a
profit of £18 million in seven years, or just over £2.5 million a
year. A few thousand pounds of Council Tax isn't going to make much
of a dent in that.
Interventions by this and previous
governments aimed at addressing failures at the opposite end of the
market have been no better. The other streets where boarded-up
houses lie empty, and bulldozed vacant lots stand unattended, are the result of the Housing
Market Renewal Pathfinder programme in Oldham (below), Liverpool and several other northern cities, started by Labour
and prematurely shutdown by the coalition. Both bad decisions.
The abysmal record of government
interventions at both ends of the property market highlights the
failure of market-based solutions to a problem that requires social
and economic planning, not blind faith in the beneficence of
laissez-faire profiteering. More pictures here.
