Research Briefing: Two Kinds Of Empty

Why hard-to-reach vacancy needs two different policy responses, and why the data cannot currently tell them apart

Empty homes are routinely discussed as a single problem with a single toolkit of interventions. We believe, however, that the most persistent and policy-resistant vacancy in England falls into two distinct categories that fail to respond to standard approaches, essentially for opposite reasons.

The first is financialised private vacancy: homes held through corporate and offshore structures as stores of capital, where occupancy was never the owner's objective. For these owners, council tax premiums are a manageable holding cost, and enforcement tools stall against ownership structures designed to be difficult to reach.

The second is stalled public vacancy: empty local authority homes, concentrated in estate regeneration pipelines, where the owner is fully identifiable and legally empowered to act, but where factors include sustained fiscal pressure on local authorities narrowing the institutional capacity to pursue any delivery model beyond a conventional private development partnership, even when that model has demonstrably stalled.

The standard policy response treats both as enforcement problems. In fact, one is an ownership transparency problem and the other is an institutional capacity problem. Neither can currently be measured, because the occupancy data released through council tax records is blind to ownership, at least in so far as it appears in publicly available data sets.

Empty homes are several problems sharing one statistic

Nationally we identify overall vacancy in England at 1,022,000 homes. Official data releases deduct second homes from this figure to give 754,000 empties of which over 300,000 are officially classed as long-term empty. In London, the total overall vacancy is 161,000 homes. Deducting second homes, London has 105,000 empty homes of which over 47,000 are classed as officially long-term empty.

We know that all these figures in fact misrepresent and under-estimate both degree of vacancy and length of time vacant. However we predominantly use the official data both for consistency and because its pattern of change in the last decade asks fundamental questions that this project seeks to go some way to answering, as a basis for making policy proposals designed to alleviate the negative social impacts and to improve access to genuinely affordable housing.

Significant portions of overall vacancy are reachable with existing tools, although the tools are blunted by current implementation guidelines and those empowered to use them are frequently under-resourced and hamstrung by lack of political leadership. However, in most cases Probate resolves, if slowly. Frictional vacancy churns, subject to market conditions. While owners who are slow to sell or renovate may respond to the Empty Homes Premium, which since April 2024 can be charged at up to 100 per cent of council tax liability after a property has been empty for just one year; with escalations at 5 and 10 years empty. A 100% Premium can now also be applied to furnished empties or so-called second homes, if only at the 100% level.

Category 1: Financialised private vacancy: when occupancy was never the point

This refers to the use of residential property as a store and vehicle of capital, independent of occupation. So-called buy to leave, in which new-build property is purchased as an investment and left empty. This is the visible symptom of a broader pattern in which housing functions as a financial asset rather than as shelter, or a home.

Research using the OCOD+ dataset, developed at Kingston University and University College London with initial support from Trust for London, shows this pattern is not anecdotal. Approximately 106,000 residential properties across England and Wales are held by offshore entities, frequently through corporate structures routed via low-tax jurisdictions. The property's function is capital preservation or appreciation, rather than habitation. For an investor of this kind, occupancy is at best a secondary consideration and at worst an operational inconvenience.

This is the demand-side counterpart to the housing shortage. The same scarcity that drives up prices for residents makes prime urban property an attractive store of value for capital seeking safety and appreciation, and a portion of that capital has no need for the property to be lived in at all.

It’s important to understand underlying motives. At one end is capital preservation: wealth stored in a tangible, appreciating and politically stable asset, for which any recurring charge functions as a custody fee. In the middle is speculation on land value uplift or onward sale. At the far end, documented in National Crime Agency assessments and in Transparency International's work on London property, is the use of property as a destination for illicit or untaxed capital. The distinction matters for policy design: a flat premium is a minor cost to a capital preserver, a calculable input for a speculator, and close to irrelevant where the primary concern is concealment. A charge intended to change behaviour has to be designed against the motive, not the vacancy alone.

Why the toolkit fails here

The mechanisms available to councils, principally routes of enforcement and Council Tax premiums, work reasonably well where the owner is an identifiable individual responding to ordinary financial incentives. They are much weaker against layered corporate and offshore structures, for two reasons.

• The premium is priced in as a long-term manageable cost of holding the asset rather than a deterrent. It functions as a fee, not a sanction.

• The owner cannot be reached. Enforcement instruments depend on the ability to identify, locate and serve notice on an accountable owner. That becomes materially harder when the registered proprietor is an overseas corporate vehicle several steps removed from the individual who controls the asset.

Councils are, in effect, being asked to use tools designed for owner-occupiers and small landlords against a category of owner for whom occupancy was never the point.

Category 2: Stalled public vacancy: when the owner cannot act differently

A third of the nation’s local authority owned vacant homes are in London and this figure has risen significantly in the last decade from over 6,581 to nearly 11,000 – a rise of 67% but while some local authorities numbers have dropped, others have escalated dramatically – Haringey’s borough total, for example, rising from 103 in 2016 to 1,033 in 2025, Southwark’s total, in London’s largest stock-holding authority rose from 578 to 1,285 in the same period.

This is conventionally explained by constrained capital budgets, and the long timelines of estate regeneration. Those factors are real, but they are incomplete. Constrained budgets explain why a regeneration scheme is delayed. They do not on their own explain why, scheme after scheme, the delivery model pursued defaults to dependence on a private development partner rather than alternatives such as direct council-led delivery, phased meanwhile-use, or community land trust models.

Ongoing comparative research suggests sustained austerity-era budget pressure does not only constrain what a council can afford. Over time it narrows what a council's officers and members can institutionally conceive of as a viable way to deliver housing at all, independent of whether better-resourced alternatives might in principle be deliverable. This narrowing operates through identifiable channels: heightened risk aversion in the wake of successive section 114 notices; the loss of experienced regeneration, legal and development finance staff through repeated budget rounds; and procurement path dependency, in which the in-house expertise needed to structure anything other than a conventional private partnership no longer exists. Familiar narrowed approaches and contracts become the only approaches and contracts considered to be available. Stalled estate regeneration sits within this context narrowing institutional options.

Why the toolkit fails here

Here, identifying the owner is not the obstacle. The council owns the stock and has full legal capacity to act on it. The constraint is institutional rather than legal: the bandwidth, established precedent, and internal mandate to pursue anything beyond the conventional model may simply no longer exist inside the organisation. Enforcement-style remedies are irrelevant to a problem of this shape.

Don’t these schemes simply require private capital and risk-bearing capacity that councils cannot match? Often they do. The problem is not private partnership as such; it is lock-in to a single, stalled model and the absence of any institutional Plan B, whether phasing, meanwhile use, a different type of partner, or direct delivery of parts of a scheme. The remedy is not to reject private finance but to rebuild the capacity to negotiate and structure such deals from a position of strength rather than desperation.

Two types of vacancy: quick comparison of the two categories

Category 1: Financialised private vacancy

Owner identifiable?

No. Ownership sits behind layered offshore or corporate structures.

Owner's incentive to act

Low. Occupancy was never the point;

The premium is a manageable holding cost.

Why enforcement fails

You can't serve notice on an owner you can't locate or identify.

Root cause

Ownership transparency problem.

What actually works

Beneficial ownership verification

ATED-style charges scaled to asset value.

Opposite failures, one blind spot

These two categories are resistant to the standard toolkit for opposite reasons. Financialised private vacancy persists because the owner cannot be effectively reached and has little incentive to respond positively where this is achieved (because it conflicts with their fundamental rationale for ownership). Stalled public vacancy persists because the owner's capacity to act differently has narrowed. Treating both as failures of enforcement alone misdiagnoses the second entirely and under-equips the first.

The deeper problem is that neither category can currently be measured..

The two categories can also feed one another. An authority unable to deliver a stalled regeneration site may ultimately dispose of it, and where the purchaser is a corporate or offshore investor content to hold the land, a public vacancy is converted directly into a financialised private one. Institutional incapacity is, in this sense, one of the routes by which public assets enter the offshore circuit, a further reason to analyse the two problems together even though their remedies differ.

The ownership blind spot

The Council Taxbase, the main source of empty homes data used by government and by scrutiny bodies, records occupancy status but says nothing about who owns a property or why it is empty. It is, by design, blind to ownership structure. The Register of Overseas Entities, introduced in 2022, was meant to close this gap, but independent analysis of Companies House and HM Land Registry data (CAGE working paper no. 680) found around 8,000 properties where the overseas entity's reported corporate beneficial owner had no valid basis for exemption under the Register's own rules, meaning the true beneficial owner is effectively unreported. Trust-held property remains only partially visible, and identity verification for directors and persons of significant control will not be complete across the existing company base until late 2026.

The two datasets needed to assess investment-driven vacancy, occupancy status from council tax records and beneficial ownership from Land Registry and Companies House, are neither linked at property level nor reliably complete on the ownership side. The OCOD+ dataset demonstrates that property-level linkage is achievable at scale; it also demonstrates the limits of what is currently knowable from public data alone.

The capacity blind spot

There is currently no systematic way to identify which councils' stalled regeneration sites reflect institutional capacity constraints that support could address, as opposed to sites where the binding constraint is genuinely financial and requires capital funding instead. Without that distinction, support risks being allocated on the basis of which councils ask loudest rather than where it would be most effective. Councils themselves are poorly placed to commission this diagnostic work: the Local Government Association estimates a combined funding gap of £6.2 billion across 2025-26 and 2026-27, and a council under that pressure has neither the spare capacity nor, often, the institutional appetite to commission a diagnostic of its own constrained decision-making.

What this means for local campaigners and councils

For campaigners and councillors trying to interpret empty homes in their own area, the practical implication is that the local empty homes total should be disaggregated before any policy demand is formulated. Useful questions include:

• How much local vacancy is frictional or probate-related, and therefore likely to resolve without intervention or through using standard enforcement measures?

• Are there concentrations of long-term vacancy in new-build or prime stock that might indicate investment-driven holding? Is corporate or overseas ownership visible in Land Registry data for those properties?

• How much of the local total is council-owned, and is it attached to a regeneration scheme? If so, how long has the scheme been stalled, and what delivery model is being pursued?

• Is the appropriate local response an enforcement intervention (use the toolkit), a transparency demand (identify the owners), or a capacity demand (fund and support the council to deliver differently)?

A campaign that demands enforcement against a stalled council scheme, or capacity funding aimed at offshore investors, will miss its target. Matching the approach to the root cause is the single most useful thing local intelligence can achieve.

Recommendations:

For national government

1. Close the beneficial ownership gap in the Register of Overseas Entities by requiring Companies House to verify, rather than passively accept, the basis on which an overseas entity reports a corporate beneficial owner instead of an individual.

2. Fund a standing data-matching capability linking Council Taxbase occupancy records to HM Land Registry and Companies House data at property level, available to local authorities, combined authorities and the GLA for monitoring purposes.

3. Extend the established Annual Tax on Enveloped Dwellings model, which since 2013 has charged corporately held residential property an annual amount banded by asset value, so that demonstrated long-term vacancy attracts a higher band or a dedicated surcharge. Because the valuation and charging machinery already exists, this is an extension of current practice rather than a new tax, and it addresses the central weakness of flat percentage premiums, which a long-horizon investor treats as a manageable holding cost.

For the Mayor of London and combined authorities

4. Treat empty local authority housing as a distinct policy strand with its own programme of capital funding and delivery support, separate from measures aimed at financialised private vacancy.

5. Fund or commission a diagnostic capability to identify which councils' stalled regeneration programmes need capacity-building support to pursue alternative delivery models, as distinct from those needing capital funding alone. One workable form would be a small standing team of regeneration, development finance and community engagement specialists, deployable to individual councils as a troubleshooting resource.

6. Use convening powers to press government on the pace of beneficial ownership transparency reform, since this is primarily a matter of national legislation and Companies House enforcement capacity.

For local authorities and campaigners

7. Disaggregate the local empty homes total before formulating policy demands, distinguishing frictional, investment-driven and council-owned vacancy.

About the author

This paper draws on written evidence submitted by Dr McKenzie to the London Assembly Housing Committee's investigation into empty homes, June 2026.

Dr Rex McKenzie is Senior Lecturer in Economics at Kingston University London and co-founding Director of Faultlines Research Collective. His research examines how global capital anchors itself in local property markets, a framework he calls wealth chain urbanism, developed in his forthcoming book The Extractivist City (Palgrave Macmillan, November 2026). Before academia he spent ten years as a foreign exchange dealer in international banks in London and a further six years as treasury manager for multinational banks in the Caribbean, an insider's view of the capital flows his research now traces. His current comparative work examines how sustained fiscal pressure reshapes local authorities' institutional capacity to pursue alternatives to investor-led development.

Category 2: Stalled public vacancy

Owner identifiable?

Yes. The council (or HA) own the stock outright.

Owner's incentive to act

Present, but blocked. The council wants to deliver, it just can't conceive of a route beyond the stalled model.

Why enforcement fails

Enforcement is irrelevant. Legal capacity to act was never the problem.