Stamp Duty revenue generated from property sales in London has the potential to deliver a 91% increase in the number of affordable homes built in the capital each year, reports leading housing association Network Housing Group.
The London Finance Commission’s report Raising the Capital, released today, recommends wide reaching changes to tax raising and spending, including calls for the Mayor to be given control over business rates, stamp duty and other taxes.
Network Housing Group has calculated that the cost of building a new home in London is typically £170,000. Annual Stamp Duty revenues of approximately £1.3 billion would therefore fund the construction of an additional 7,647 affordable homes in the capital every year. In 2012 a total of just 8,380 affordable homes were built across the 33 London boroughs, so the additional revenue would deliver a significant 91% increase in the number of affordable properties being built.
At a time when construction levels are at an all time low, while social housing waiting lists are longer than ever, London’s housing crisis is at the edge of a precipice and can only be solved by a radical change in policy. The number of households currently on waiting lists in the capital is in the region of 354,389. Private rented temporary accommodation paid for by housing benefit has, up to now, provided a safety net for homeless families, but recent welfare reform has slashed housing benefit funding and increasingly councils are being forced to place homeless families outside the capital. Indeed, Westminster is among those boroughs placing more and more families with children in Bed and Breakfast beyond six weeks.
Helen Evans, CEO of Network Housing Group, said: “With property prices in London rising faster than anywhere else in the country and construction starts at shockingly low levels, there is a desperate need for more affordable homes in the capital. Londoners account for 13% of the UK population, yet they generated one third of the country’s Stamp Duty revenue last year. While the Treasury will of course be reluctant to relinquish control of this significant income, it is precisely this kind of radical solution that is required to tackle a situation which has been left to deteriorate for far too long.”
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