Speaking at the CIH Presidential
Dinner, London Mayor Boris Johnson this week called for removal of
borrowing caps to allow councils to build more homes.
His demand for control over the £1.3 billion in stamp duty
raised annually in London attracted more column inches in the
media, and was instantly rejected by the Treasury, on the grounds
that it would distort housing markets on London's fringes.
But this was only the first demand in a list which included the
transfer of surplus government land to City Hall, more freedom for
councils to build new homes, a sustainable financial environment
for housing associations and new private rented sector development
on 3 GLA sites.
London will need a million new homes by the mid-2030s to retain
global competitive and secure continuing economic growth. The
current "planning-led" system has not delivered in the last 20
years and cannot be relied on to deliver in future, argued
The Mayor and councils both need more powers and freedom to solve
London's housing crisis. Localisation of receipts from stamp duty
would provide a substantial and dependable income stream to support
investment and intervention in London housing markets, and would be
in line with plans to allow Scotland to retain Stamp Duty receipts
from 2015, which may also be extended to Wales. But councils also
need more freedom to tackle housing problems, including removal of
debt caps to allow more borrowing for investment.
The Mayor joins a growing list of advocates for reform normally
more in sympathy with Coalition policy. It includes the central
London boroughs of Hammersmith & Fulham, Kensington &
Chelsea and Westminster, all Conservative-controlled.
In response to the disappointing GDP figures
published two weeks ago, the Liberal Democrats also broke ranks
with the coalition to propose that councils to be freed to build
60,000 new homes to meet housing need, create jobs and boost the
economy. Will the argument now start getting through to the