Yesterday, Ed Miliband launched Labour's local election campaign. If you'd read many of the headlines reacting to the news, you'd have thought that he'd pledged to rain hell fire down upon those rich people who are currently using London's empty homes as investment opportunities.
"MILIBAND: I'LL TAX 'GHOST HOMES' OF THE RICH" screamed the London Evening Standard's front page. For some time now, property – super-premium London property in particular – has been seen as a stable place for the super-wealthy to park their money. Bought as investment opportunities, their owners never planned to live in them. The housing bubble is inflating to the extent that these places can just sit there, gaining value and not housing anyone.
The upshot of this is that an estimated 60,000 properties are currently standing empty in London, of which 740 are known as "ghost mansions" – opulent addresses that are empty, dark and rotting during the biggest housing crisis in London's history, frustrating those on waiting lists and driving up prices for everyone who does actually want to live here. All the while, homelessness continues to rise.
But never fear, as Miliband is riding to the rescue. How? By doubling the council tax bills for absentee owners who leave their properties standing empty for more than a year.
Maybe it's just me being a cynic, but doubling the council tax bills of people who buy and sell property as investment opportunities worth millions of pounds doesn't sound like too much of a deterrent. Especially when the average bill is expected to rise to about £2,600 after Labour's punishment.
A few months ago, I was given a tour of Mayfair's ghost mansions by Paul Palmer. Paul used to be the empty properties officer for Westminster, and so has an encyclopaedic knowledge of the long-term empty properties in the area. He guided me round as it got dark and it became obvious which buildings were homes with lights on and which were empty investment opportunities, black inside as darkness descended, because there was nobody in.
When I read about Miliband's attempt to put a stop to this, I decided to ask Paul what he thought of it. He was pretty clear: "Doubling the council tax won't touch the problem of the large empty ghost mansions of London. If you are investing millions, you don't worry about a few thousand in taxes."
I guess he's probably right. This place faces onto Park Lane and is worth around £5-6 million. If the owners can't absorb the hit of a few grand what kind of oligarchs are they?
I wonder how many bottles of champagne whoever owns this place would have to forgo in order to cope with the new tax. Given the quality of champagne this person must drink, probably one.
That's assuming the owner is a person at all and not an offshore investment company. Paul said that such firms owned a lot of the places that we visited but it's hard to establish exactly which ones because they tend to be elusive. Walking around Mayfair, it was fun to guess who owned which buildings: Saudi oil princes, Russians who own most of the world's gas, island-based tax avoidance schemes, eccentric old bats whose progeny are waiting for them to die, or whatever.
A lot of the properties I saw had been squatted in the past. Someone once told me that she used to squat in one of these mansions, and when her crew got kicked out they would simply move next door in the knowledge that it would almost certainly be empty.
I mean, this was in the window of a shop in the area. I wouldn't be able to fit this in my house even if I could afford it. If the property owners find themselves a bit short should this tax bill come into effect, maybe they could just buy fewer gilded ornamental elephant statues?
I wonder what percentage of London's rough sleepers you could fit in here?
But the owners had thought of that, too, and paid somebody to make sure it remained empty. You'd imagine it's costing them more than a few grand to do that each month.
This place is less a "ghost mansion" than it is a haunted castle.
To be fair to Miliband, the tax was just one measure in a whole raft of property-related ideas. Other pledges he made include banning developers from marketing apartments to foreigners before Londoners are given a chance to buy them, and stopping owners avoiding the "Empty Homes Premium" by putting some old furniture in a house and pretending it's occupied. He has also said that Labour will build 300,000 new houses during their rule if they're elected next year. Politicians have broken these types of policies before, but maybe Miliband won't? I guess it's impossible to say.
At this stage, Miliband's big tax idea seems like a gesture as empty as the ghost mansions themselves. Paul had another suggestion. "What needs to happen is this: Once a property has been vacant for two years, then a one-off annual tax of 5 percent of its value is made. This happens each year, rising by 5 percent each time until they are paying almost 100 percent of the property's value in tax."
Now that's how you scare an oligarch.