London mayor Boris Johnson will today float plans to invest £1.3 billion a year in new housing by retaining all stamp duty paid in the capital
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Claiming UK growth and global competitiveness are at risk, Johnson will call on government to allow City Hall to keep all stamp duty receipts raised on London property sales.
This could raise £1.3 billion a year, providing the capital with a ‘stable funding stream’ to build the one million new homes it is projected to need by the mid 2030s.
A three per cent stamp duty must be paid on properties costing more than £2 million. The high number of multi-million pound properties sold in the capital has led some to describe the levy as a ‘London tax’. Scotland will retain its stamp duty receipts from 2015.
In a speech to a Chartered Institute of Housing dinner this evening, Johnson is expected to call for a ‘radically different approach’, claiming without new homes London ‘will suffer and the whole country will feel the consequences.’
He will say: ‘Even in the toughest of economic times London has shown that with fresh thinking it can deliver, with record affordable house building figures in my first Mayoral term. So I am calling on the coalition to give us the tools and we will solve the crisis, supporting and creating hundreds of thousands of jobs and boosting economic growth across the UK along the way.’
The revenue stream would enable City Hall to borrow money on the capital markets to stimulate infrastructure investment and unlock housing growth.
It would also be used to kick-start stalled developments and make longer-term commitments to regeneration of existing housing estates.
The £1.3 billion-a-year funding stream would also be used to:
- Giving London boroughs more freedom to build homes. This would include removing the borrowing limits on town halls which severely restricts their ability to deliver new homes.
- Giving housing associations long term certainty to build affordable and market homes.
- A new affordable housing settlement for London from 2015 with rents reflecting incomes and within housing benefit levels.
- Demonstrating how purpose-built, custom-designed private rented homes can accelerate delivery on three GLA-owned sites.
- The transfer of surplus government land to City Hall to maximise development opportunities.
- Test a new graduate-style housing product to encourage major employers to invest in accommodation programmes to help attract staff.
- Launch a new City Hall initiative with developers to identify housing schemes for the London Pension Fund Authority to consider for investment - an opportunity which would be extended to other pension funds.
- Helping City Hall to review the capital’s stalled development sites and challenge owners to ‘use’ or ‘lose’ them.