Elliot Rainbow, CEO of Ernest Brooks International
A Policy That Misses the Mark
The empty homes tax was meant to be a deterrent. It’s turned out to be little more than background noise.
Since 2013, owners of long-term vacant homes have faced sliding council tax penalties of up to 300%. But over a decade later, the number of empty homes in England has risen. It’s clear this policy hasn’t moved the needle – because it completely misunderstands the psychology and profile of those holding these homes.
Why the Super-Rich Aren’t Blinking
At the top end of the market – think luxury flats in Mayfair or investment units in Canary Wharf – the tax is simply irrelevant. For many international or ultra-high-net-worth owners, a 300% council tax bill is a rounding error. These properties aren’t left empty by mistake. They’re strategic assets, safety deposit boxes in a volatile world, and the owners don’t flinch at minor surcharges. You don’t get behaviour change when the financial sting barely registers.
At the other end, many properties are stuck in probate, in disrepair, or located in areas with little rental demand. A tax doesn’t solve those problems. In fact, the most effective reduction in empty homes came not from tax, but from government-backed incentives and refurb grants in the early 2010s. Once that support dried up, empty homes rose again. The stick has never worked without a carrot.
Loopholes Undermining the Policy
Loopholes also let many dodge the charge altogether – simply furnishing the property and declaring it a second home is often enough. And while the upcoming second home premium aims to close that, I suspect we’ll see history repeat. Wealthy owners will find another workaround. Just look at Wales: second home premiums haven’t stopped the influx of empty holiday homes across coastal towns. Council tax is a blunt tool. If we want to change investor behaviour, we need sharper instruments.
What Might Actually Work?
One potential fix? Index the tax to the value of the property, not a flat-rate council band. A 1% annual charge on a £5 million vacant flat suddenly becomes £50,000 – that’s a bill even the super-rich notice. Tie that to a tighter timeline – penalties kicking in after 6 months, not a year – and enforce it consistently, and you might see movement.
But we must also tread carefully. While cracking down on empty homes may sound politically popular, layering punitive taxes and stripping landlords of rights through upcoming legislation like the Rent Reform Bill risks creating deeper problems. In Ireland, similar reforms led to an exodus of private landlords, rent spikes, and queues round the block for rental viewings. The UK risks importing that crisis.
A Shift In Investor Sentiment
We’re already seeing signs. At Ernest Brooks International, over 70% of our landlord clients are from East and Southeast Asia. Many are now choosing to leave their London flats empty rather than sign tenancy agreements that could leave them powerless to regain possession. That might sound extreme, but it shows just how worried the market is. It’s no longer just about tax – it’s about control, predictability, and risk. Take that away, and landlords pull out. Tenants are the ones who suffer.
At the same time, Britain is already seeing a record number of millionaires leaving the country each year – and housing policy plays its part. Do we really want to be a country that drives out global capital while simultaneously wondering why investment is drying up? Punishing wealth may win headlines, but it doesn’t build homes. Smart policy does.
If we want to bring empty homes back into use, we need a balanced strategy – not just heavier taxes. That means incentivising refurbishment, empowering councils to use empty dwelling management orders, offering adaptive reuse grants, and creating clear paths for local authorities or housing associations to step in. For second homes, we should consider planning restrictions in oversaturated areas and rethink business rate loopholes. Above all, we need to distinguish between those gaming the system and those genuinely struggling to bring properties into use.
The housing crisis won’t be solved by beating landlords with a stick while letting the system rot around them. It’ll be solved by engaging with the realities of ownership, finance, and development – and designing policy that actually addresses the reasons homes are empty in the first place.
