Wednesday, July 04, 2007

Happy Birthday EDMOs

It was a year ago today that local authorities gained the power to use Empty Dwelling Management Orders. The Daily Express claimed that there would be a national purge on empty homes with thousands seized under the new powers. It claimed that the government had built up a war chest that would fund the programme. This, the Express claimed was the single worst act by a British government, TV presenter Kevin McLeod said that with the new powers the UK had effectively become a communist state. The Daily Mail claimed that it was a sinister plot to snatch homes off the dead. All I'm afraid to say a bit over-dramatic. There have been three interim EDMOs made, and no final EDMOs. No properties have been seized. And I don't know what you think but it doesn't feel much like a communist state to me.

On the other hand many empty home owners have heard about the new powers and a good number have decided that perhaps they had better do something with their property before the council gets their hands on it. Depending on your view that may or may not be a good thing, but it's far cry from the hysterical vision that much of the tabloid press painted a year ago today.


  1. While EDMOs are a potentially useful tool, their main problem is that they are reactive and as such don't deal with the main cause of empty property, which is that it is generally profitable to hold property empty as an investment.

    There is an economic solution to the problem which could be introduced fairly easily with a little political will and would completely eradicate the problem of empty property. I describe it as "Land Value Sharing." The principal of a Land Value Tax has long existed, based upon the theory of a tax levied in proportion to the value of land held, given its current permitted use (in some respects similar to business rates, but levied on all land and giving no benefit for any deterioration which is allowed to occur to property on the land).

    The main problem with this tax is the objection that land value is not directly related to the ability to pay (as with Council Tax). One way around this is to move from Land Value Tax to Land Value Sharing, the difference being that under the latter, the revenue would not be spent by government but would be paid out directly to the electorate, with each person on the electoral register receiving an equal share. This way, those holding less than the average value of land would profit, those holding more would pay for the privilege.

    By making all land holders pay for holding land, it would make it increasingly unattractive to hold empty property. I would propose initially introducing the charge at a small percentage of the value of the land, but gradually increasing it. The ideal situation would be to have a committee, similar to the Monetary Policy Committee, tasked with setting the percentage charge at such a level that the value of residential property increases in line with inflation. That way, there would be little incentive to hold residential property as a capital investment, as there would on average be no increase in its value in real terms and as the property owner would be paying a charge for owning it, they would be making a large loss unless they put it to use, i.e. lived in it or rented it out.

    I'd love to think that one of the main political parties will adopt this solution, but unfortunately, I don't think there's any desire within them for creative thinking!

  2. i remember when EDMOS were introduced, the newspaper reports and some reactionary comments on this site. it seems the recent economic upturn has left a lot of free marketeer exponents for self non interference looking a bit silly. i imagine the conservative party, who opposed these initially, are possibly changing their colours on this as is the mode.

    interesting comment here, also about land value sharing.