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Boris Johnson: 'Allow London to keep stamp duty receipts and we'll build one million homes'

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Boris Johnson: 'Allow London to keep stamp duty receipts and we'll build one million homes'

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Published by Jon Land for 24dash.com in Housing and also in Central Government, Local Government

Boris Johnson: 'Allow London to keep stamp duty receipts and we'll build one million homes' Boris Johnson: 'Allow London to keep stamp duty receipts and we'll build one million homes'

The Mayor of London Boris Johnson is today calling on the Coalition Government to allow London to retain all stamp duty receipts raised on its property sales, estimated to be worth £1.3 billion a year, to ensure the capital can build the million homes it requires by the mid 2030s.

According to the Mayor, today's proposal would give London a stable income stream to create a 25-year plan that will not just solve its housing needs but would create hundreds of thousands of long-term jobs and give a massive boost to its economy benefiting the whole of the UK.

In a keynote speech to the Chartered Institute of Housing tonight, the Boris Johnson will tell its members that London can not rely solely on a 'planning-led’ system which has delivered only half the number of homes needed for 20 years.

He believes that London, not Whitehall, is best placed to address the problem and points to the heavily disputed fact that a record number of over 50,000 new affordable homes were built in his first term and the introduction of innovative programmes to meet the different needs of Londoners under the Mayor’s Housing Covenant.

In addition, he will tell the CIH, since his re-election in May 2012 more than 100 hectares of public sector land, equivalent to twice the size of London’s Soho district, has been released to the market giving the capital's economy a £1 billion boost.

According to the Mayor's plan, stamp duty, the tax on London’s successful but overheated housing market, should now be used to offset the costs of that success. With the majority of Londoners paying at least 3% stamp duty and new levies on homes costing over £2 million focused largely on central London, it is increasingly becoming a London tax.

The Mayor argues that it is right that London should retain this revenue for the benefit of Londoners who will drive the growth that will lead Britain to increased economic prosperity. This would be in line with the coalition Government's cornerstone policy of localising spending and returning power and decision making to the regions especially when Scotland will retain its Stamp Duty receipts from 2015 and Wales is likely to follow suit in the future.

The Mayor's stamp duty 'ask' of the Government is top of his list of key measures that must be given to the capital to reverse the housing shortage which can only get worse.

These include:

  • 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.

The Mayor of London, Boris Johnson, said: "Since I was elected London's population has grown by 600,000 and is forecast to rise by a further million at least over the next 25 years. If we do not come up with a new plan to build the homes we need, this great city will suffer and the whole country will feel the consequences.

"What is needed now is a radically different approach which optimises City Hall's role, unlocks the potential of the capital's boroughs, allows developers including housing associations to up their game and creates a stable supply of land for housing. Above all, London needs a stable funding stream which will support and accelerate its housing and infrastructure delivery.

"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."

In support of the Mayor's plans, Cllr Jonathan Glanz, Westminster City Council’s Cabinet Member for Housing and Property, said: “The Mayor’s proposals have the potential to halt the polarisation of central London as a place where only the wealthy and needy can find homes.

“It makes absolute sense for London to retain the stamp duty on sales, particularly in boroughs like ours and Kensington and Chelsea where the preponderance of high value properties triggers the higher rates of stamp duty. With the Mayor’s support, I hope we can persuade the Government to allow this income to be retained locally where it can help fund local authority house building.

“Westminster Council has been lobbying on the need to release the borrowing cap on the Housing Revenue Account to allow us to build a range of homes. The fact is we have a housing crisis and we urgently need to increase our housing stock of all kinds.”

London Councils’ Executive Member for Housing, Mayor Sir Steve Bullock, welcomed the Mayor’s commitment to solving London’s housing crisis.

Sir Steve said: “London is in the grip of an acute housing crisis and the only solution is to start building more homes – one which London’s boroughs are ready and willing to embrace. If borrowing limits on town halls are removed, local authorities can build up to 54,000 new homes. We are pleased that the Mayor is joining us in campaigning for this freedom.

“The Mayor is right when he says that London government – and not Whitehall - is the best place for addressing this problem and London’s boroughs are keen to work out the details of his 25-year plan alongside him. This 25-year approach is the only way that London can avoid the expected deficit of 221,000 new homes by 2020. Letting London retain stamp duty receipts on its property sales will go some way to ensuring there are sufficient good quality, affordable homes for Londoners.

“Developers are clearly part of the housing solution in London. However the Mayor’s challenge to ‘use it or lose it’ is particularly helpful in moving forward on the 170,000 homes in London where councils have given planning permission but are not being built.”

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