New research suggests London could self-finance more than 42,000 homes each year, twice the number started in 2014, if ministers allowed the capital to retain the stamp duty currently raised within its borders.
Allowing City Hall and London’s councils to keep locally raised taxes in lieu of Government grants was first proposed by the London Finance Commission set up by Mayor Boris Johnson in 2012.
The idea has since won support from all four parties currently represented at City Hall and the main contenders to succeed Mr Johnson when he steps down next May.
Earlier this month Chancellor George Osborne announced local councils will soon be able to keep 100% of the cash collected through business rates and now Conservatives on the London Assembly want him to devolve stamp duty as well.
Gareth Bacon AM says doing so would give the capital’s politicians direct control of a £4.28bn fund which could build 42,614 homes each year.
He 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.”
Mr Bacon’s research has been welcomed by Mayor Johnson who said the figures “show just why stamp duty should be devolved to London government, as the independent London Finance Commission has also recommended”.