New York style property sales levy could raise £62bn for housing, report says

A levy on the sale of property which could generate up to £62bn in long term bonds, a more people-centred approach to design and further devolved powers to local authorities are all proposals set out in a new paper which attempts to fix the UK’s broken housing market.

The latest report published by the Association for Consultancy and Engineering (ACE) issues 10 recommendations on how the UK government and local authorities can address challenges which continue to see housebuilding levels well under target.

It comes after the prime minister last November made it clear that fixing the broken housing market was her key priority while in power at number 10. Theresa May said it was her personal “mission” to get more homes built across the country, more quickly. 

A central idea in the paper entitled Unlocking Housing: Invigorating local communities through placemaking is the introduction of a levy on the sale of property mirrored on a scheme currently in place in New York, which could raise as much as £62bn in long term bonds in England, according to ACE.

The proposed levy would charge a 1% tax on the sale or transfer of property worth £350,000 or less and 1.425% if worth more. The consultancy and engineering body estimates that this could raise £2.16bn if applied in England alone. Transferred to local authorities, this could be worth £62bn in long term bonds– more than the current budget of the Crossrail, and HS2 projects combined.  

Commenting on the new research published, ACE chief executive Nelson Ogunshakin, said for too long the country had “skirted around the issue” of housing and that new ways of funding housebuilding was needed now.

He added: “Our proposals are mirrored on a proven model and would enable local authorities around the country to share in the gains of the property market and receive the vital funds they need to kick-start a housing revolution and invest in its supporting infrastructure, so all can benefit. In our view, local authorities are best placed to tackle the housing crisis and a property sales levy would ensure they have the tools at their disposal to do so.”

Yet despite the predicted 300,000 houses needed annually to match the shortfall, ACE stresses that a culture of “build, build, build” will not fix what is broken. 

Placemaking is believed to be very much a necessary component in the process whereby a people-centred approach to the planning, design and management of public spaces is embedded. The principle involves looking at, listening to, and asking questions of the people who live, work and play in an area. 

The paper states: “We see a clear link between the diversity of communities and building designs that are unique to a local area. We therefore believe design requirements should be tailored for local areas and developed through a local authority’s placemaking strategy. This would allow for locally responsive design to respond to the needs and aspirations of the area, such as the desired ‘look and fee’ and how new developments sit within a wider concept.”

Another recommendation outlined in the report is for the National Infrastructure Commission’s (NIC) remit to expanded to include housing and for the commission to create an England-wide national spatial plan to provide a more informed view on how growth can be incorporated across the country.

To help take these proposals to the next stage, ACE is supporting the establishment of a new All Party Parliamentary Group on Building Communities. The group will promote ideas around placemaking to the heart of politics and encourage a public debate on the human dimension of infrastructure investment and building the homes the country needs. 

MPs and Lords who have already expressed an interest in the group’s establishment include:Bob Blackman, Sir Graham Brady, Baroness Brown, Baroness Chalker,Stephen Hammond, Mark Prisk, Lord Shipley and Matt Western.

This article was updated on 19 June to reflect changes made in the respective report after it was published.

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