More erratic changes to property tax could stop the housing recovery in its tracks, according to a new report written by Professors at the London School of Economics and commissioned by the Berkeley Group.
The report argues that uncertainty is the biggest threat to a sustained recovery in housebuilding and that property tax is now the single biggest concern for domestic and international buyers.
'We have had years of reactive changes and deliberate inaction', says Rob Perrins, Managing Director of the Berkeley Group. 'The idea of a mansion tax is just the latest example of a political response rather than a coherent approach to creating a fair and predictable system. What we need is a comprehensive review of property taxation, looking at stamp duty, council tax, inheritance tax and the annual charge all at the same time.'
The LSE report ('Creating the conditions for growth') points out that the housing shortfall is now so great that we need a massive expansion of investment just to stop the position worsening. This depends on creating a stable environment, up to and beyond the next election, in which companies and individuals feel confident to invest.
The report highlights the positive impact of international investment on the housing market and how it delivers more jobs and more tax revenue as well as more homes. The authors points out a direct correlation between international investment and the supply of affordable homes; and that during 2012 only 6.5% of sales by value in London went to overseas purchasers.
The full report, written by Professor Tony Travers and Professor Christine Whitehead of LSE London, can be found at http://www.berkeleygroup.co.uk/media-centre/reports-and-magazines from Friday 18th October.
Notes to editors:
• The Berkeley Group build homes and neighbourhoods. We focus on creating beautiful, successful places. We work together with other people to tackle the shortage of good quality homes, and we make a lasting contribution to the landscape and to the communities we help create.
• In 2012, the Berkeley Group sustained 16,000 jobs and generated £2.6 billion of economic activity in Britain.
• The Berkeley Group is publicly-owned and listed on the London Stock Exchange as a FTSE 250 company. It was voted Britain's Most Admired Company across all industries in 2011 and has been ranked Britain's most sustainable major housebuilder for the last seven years in a row by the Next Generation benchmark.
• The Berkeley Foundation supports young people and their communities across London and the South of England through charitable donations and the talent and time of our staff.