‘Time for London to finance its way out of its housing shortage’
London could finance the building of 42,614 homes per year using the £4.28bn stamp duty it raises, according to GLA Conservative Gareth Bacon.
Construction began on 20,520 new homes in the Capital in 2014.
At an average building cost of £194k per new home, the billions raised from stamp duty could fund 42,614 homes every year.
GLA Conservative budget spokesman, Gareth Bacon, said:
“We have a shortage of housing in the Capital and we can use the cash we raise ourselves to fix the problem. I welcome the Chancellor’s decision to devolve business rates to local councils, now stamp duty should be next on the list. My sums show that if the Capital uses its stamp duty on constructing new homes, it can more than double house building from 20,520 to 42,614 every year. It’s time for London to finance its way out of its housing shortage through common sense reforms.”
GLA Conservative Gareth Bacon will write to the Chancellor of the Exchequer outlining his proposal. He will ask the Mayor of London to co-sign the letter at Wednesday’s Mayor’s Question Time.
¹ The sums
· The average construction cost per m² in London is £2,279 http://rlb.com/wp-content/uploads/2015/02/rlb-international-report-first-quarter-2015.pdf (p.15), and the average house size is 85m² https://www.architecture.com/Files/RIBAHoldings/PolicyAndInternationalRelations/Policy/Housing/RIBACaseforSpace.pdf (p10), meaning an average home costs £194k to construct in London.
· In 2014, London began construction on 20,520 homes: https://www.gov.uk/government/statistical-data-sets/live-tables-on-house-building (Table 255). London generates £4.28bn per year in stamp duty https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/464298/AnnualStampTaxes-Release-Sep15.pdf (table 4.3), meaning an extra 22,094 homes can be funded, totalling 42,614 per year.