Britain has developed a talent for comforting explanations — especially ones that sound radical, assign blame elsewhere, and require nothing difficult in return. The latest is the claim that the housing crisis is not really a shortage at all. The homes already exist, we are told. They are simply being hoarded. By investors. By corporations. By people treating houses like bank deposit boxes.
If only we banned the buyers, punished the hoarders, and liberated the empty homes, affordability would return. Huzzah!
Unfortunately, this is nonsense. And it is increasingly dangerous nonsense.
This way of thinking has been given fresh confidence by events in the United States, where Donald Trump has announced a ban on large institutional investors buying single-family homes. “People live in homes, not corporations,” runs the line. It sounds decisive. It sounds moral. It also avoids the only question that actually matters in housing policy: how many homes there are.
That framing has now drifted into British debate, where it fits comfortably within a wider belief that housing problems can be solved without building more homes.
Labour MP Jonathan Hinder has put it bluntly. “These aren’t homes,” he says. “They’re bank deposit boxes for the world’s wealthiest.” That claim only works if London already has ample housing which is simply being withheld from use. It assumes, without ever stating it, that building more homes is either unnecessary or ineffective.
From there the question asks itself. Commentators such as Alex Armstrong have asked why, if investors can be banned in the United States, Britain should not follow suit.
The question is understandable. Yet it rests on a premise that does not hold.
The empty homes claim is the keystone holding this argument together, so it is worth dealing with it properly. The headline figure endlessly cited on social media and now by MPs comes from the March 2021 Census. March 2021 matters. It was the lockdown era. Universities were closed. Students were not in term-time accommodation. Tourism had collapsed. Short lets were empty. People were temporarily living elsewhere. Second homes were counted as unoccupied. Properties mid-sale, mid-renovation, or briefly vacant were swept into the total.
This was not a snapshot of normal housing conditions. It was a picture taken during a once-in-a-century displacement shock. Treating it as evidence of permanent surplus is not serious analysis. It is data abuse.
When you look at the metric that actually matters long-term vacancy, homes empty for six months or more, the story collapses. In London, the long-term empty home rate sits at around one per cent. In housing economics, that is not healthy slack. It is extreme scarcity. Markets need spare capacity to function. At one per cent vacancy, there is no room to breathe. Every additional household bids prices up. Every demand shock goes straight into rents.
This is not ideology. It is arithmetic.
If London genuinely had hundreds of thousands of usable homes sitting idle, prices would have fallen once pandemic distortions unwound. They did not. Rents surged. Overcrowding worsened. Competition intensified. Vacancy collapsed back to historic lows. Reality has already rendered its verdict.
So why does the empty homes story persist? Because it fits a belief system.
The public wants lower housing costs. That much is clear. What it does not believe is that building more homes would achieve them. Large numbers either think additional housing would make no difference, or would actually push prices up. This is not a fringe view. It is the dominant one. And politicians respond rationally to it.
In that belief environment, supply is not merely unpopular. It is unintelligible. Building is seen as cosmetic at best and counterproductive at worst. New homes are interpreted as evidence of rising demand, not as a remedy for it. Expensive flats become proof that construction causes high prices, rather than the result of building being rationed to scarcity.
Once that belief takes hold, the rest follows mechanically. If prices are high and supply is not the cause, then blame must fall somewhere else. Developers. Landlords. Investors. “Wall Street”, invoked not because it explains the shortage, but because it feels like the sort of power that ought to be responsible for one. Empty homes. Moral judgement rushes in to fill the explanatory gap left by economic disbelief.
This is why price controls, investor bans, and punitive regulation poll well, while planning reform does not. It is why politicians reach instinctively for restriction rather than expansion. It is why Britain keeps adding obstacles to development while professing concern about affordability.
This is not a conspiracy. It is a system operating inside a false model of reality.
Ownership structure does not determine prices. Supply does
The investor narrative illustrates the point perfectly. Institutional landlords are treated as decisive actors in housing markets they barely touch. In the United States, institutional investors own roughly half of one per cent of single-family homes. Blackstone itself owns a fraction of that. Institutional purchases have fallen sharply since 2022. Prices have continued to rise regardless.
Why? Because ownership structure does not determine prices. Supply does.
Even the investor story collapses under scrutiny. Research by economist Joshua Coven finds that institutional investors in single-family rentals tend to expand rental supply, not restrict it, and that their net effect is to reduce rents rather than raise them. The efficiencies of scale outweigh any market power. Policies that ban or deter such investors, by contrast, shrink rental supply and push rents higher. Once again, the constraint is not ownership, but supply.
Coven’s work has since been recognised with a major housing economics dissertation prize, underlining that this is mainstream empirical research, not a contrarian curiosity.
The most awkward fact for Britain’s anti-investor campaigners is what large institutional landlords actually do. They build housing. At scale. Blackstone’s residential platforms have developed, or are developing, tens of thousands of homes in the United States. That is not hoarding. It is supply creation.
Single-family rental developments exist because millions of households want space, stability, and flexibility without the upfront costs of ownership. In many US markets, renting a professionally managed single-family home is cheaper than buying an equivalent property. That is not exploitation. It is a rational response to demand in a supply-constrained system.
None of this means investors are saints, or that regulation is unnecessary, or that every landlord behaves impeccably. It means the cartoon version of the housing market now circulating in British politics bears no resemblance to reality.
Britain has already run this experiment. We have spent decades underbuilding. We have a planning system that treats development as vandalism, empowers local vetoes, and fetishises “character” over shelter. We have layered regulation on top of regulation, each defended as reasonable in isolation, collectively catastrophic. We then act surprised when prices explode and younger generations are locked out.
The empty homes myth is simply the latest expression of this deeper failure. It flatters its proponents by casting them as morally righteous. It flatters its audience by telling them the problem is someone else’s greed. It demands no sacrifice from homeowners, no densification of prosperous areas, no reform of planning committees, no building where objections will be loudest.
That is why it spreads.
If American debate can blame investors rather than zoning constraints, British debate can blame empty homes rather than the planning system. The logic is the same. The outcome will be too.
The crisis endures because Britain refuses to build
And here is the final, uncomfortable truth. Even if you confiscated every genuinely long-term empty home in London tomorrow, it would barely dent the problem. Britain’s housing shortage is structural, cumulative, and decades in the making. It will only be fixed by sustained building on a scale our politics has spent half a century preventing.
The crisis endures because Britain refuses to build. Everything else is a mere misplaced moral judgement standing in for economics.
