May 22 2013 Latest news:
Tuesday, May 8, 2012
A think-tank is recommending a new ‘piggy bank tax’ on overseas buyers snapping up properties in London.
Top five average prices of property in London:
Kensington & Chelsea - £967,951
Westminster - £677,752
Camden - £578,803
Hammersmith & Fulham - £526,964
Lowest five average property prices:
Sutton - £244,659
Waltham Forest - £241,985
Bexley - £225,233
Newham - £221,228
Barking & Dagenham - £212,166
The tax of two per cent a year on super-rich foreign buyers of London properties worth more than £2 million - a measure the government is consulting on – would help fund the extra homes the capital needs.
This levy is one of a number of measures put forward by the Institute for Public Policy Research to address London’s housing crisis.
Analysis by the think-tank shows that by 2025 London faces a housing gap of 325,000 homes unless serious action is taken.
The average property price in the capital is £345,298, up 2.8 per cent on last year and 121 per cent higher than the national average, meaning fewer Londoners can afford to own their own home.
A little more than half (53 per cent) of the capital’s residents own, compared to two-thirds nationally.
The average cost of buying a home in London ranges from £212,166 in Barking and Dagenham to £967,951 in Kensington and Chelsea, forcing up the age of first-time buyers.
The average first-time buyer in London is 43, five years older than the national average.
The capital also has the most overcrowded households of any region, with 220,000 households living in overcrowded accommodation, an increase of 65,000 over the last decade. It also accounts for the vast bulk of England’s homelessness and temporary accommodation cases.
Andy Hull, senior research fellow at the think-tank, said: “London’s housing crisis is a crisis of affordability, for buyers and renters alike. Without a major increase in housing supply, it is hard to see a way out.
“London’s sheer scale and its particular economics mean that national housing policies frequently do not fit with the reality of housing in London and have a distorted impact on those who live in the city.”
The institute says newly re-elected Mayor of London Boris Johnson should be given power over housing benefits in the capital.
The report calls for the Mayor to be given new, decentralised powers over housing benefit as part of a rethink of welfare reform.
It suggests raising the Local Housing Allowance caps in London by £10 per week; and ultimately devolving power, resources and responsibility for housing, including housing benefits, to the Mayor.
Mr Hall added: “London is facing a housing crisis exacerbated by the rest of the UK’s reluctance to fund housing benefit costs in the capital.
“Families who find themselves living with a shortfall in their rent as a result of benefit changes are likely to struggle to find affordable alternatives because of the shortage and high cost of housing in London.
“The Mayor should be able to determine how housing benefit is allocated across London and set the relevant limits in line with prevailing market and economic conditions.
“This would enable the Mayor to adjust the current caps and remove the worst iniquities which he spoke out against during his campaign.”
The report also recommends more public land is released for development, saying public authorities in London hold enough land for more than 234,000 new homes.
And it recommends exploring new roles for Registered Social Landlords and forming a London Rent Stabilisation Board to check unreasonable rent rises.