Berkeley warns London housing targets cannot be met
House-builder Berkeley Group has warned that a lack of house-building in the capital is threatening national economic recovery.
The company said that stamp duty made it was too expensive for Londoners to move house and exorbitant community infrastructure levies made it too expensive to build new homes.
In a trading update to shareholders today the directors warned: “What is increasingly clear is that government policy, which has been helpful outside London, has had a negative effect on the capital. Transaction taxes are now too high and this is restricting both mobility in the second hand market and the pace of supply and delivery of new homes in London and the southeast. There is also a tension between the national policy on starter homes and the London mayor's ambition to build more affordable housing, while the very high rates of the community infrastructure levy adopted by local authorities now pose a significant threat to development viability.
“While these challenges persist, and the barriers to entry for small builders remain high, London will fall well short of its targets for new homes. This is not just a problem for business and ordinary people in the capital but for the country as a whole. London is the engine of our national economy and the principal driver of fiscal revenues. So this is not just a question of housing Londoners – important though that is. It poses a risk to deficit reduction and the prosperity of the whole country.”
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This article was published on 6 Sep 2016 (last updated on 7 Sep 2016).