This would mean that council tax, stamp duty land tax and business rates would be used as a continuous funding stream for prudent investment, moving away from ad hoc financing for specific projects.
The report by Professor Tony Travers, chair of the London Finance Commission, said that London needs greater financial autonomy to drive growth and deliver better infrastructure.
Critics says it could mean other areas losing out as currently London stamp duty accounts for a third of the nation's stamp duty revenues but it has been widely welcomed as a positive move.
‘Why shouldn't London use its own money to boost its profile, keep it as the number one financial centre, increase house building, develop its transport infrastructure for its growing population and improve tourism?’ said Jonathan Hudson, managing director of central London estate agents Hudsons Property.
Stamp duty revenue generated from property sales in London has the potential to deliver a 91% increase in the number of affordable homes built in the capital each year, according to leading housing association Network Housing Group.
Network Housing Group has calculated that the cost of building a new home in London is typically £170,000. Annual stamp duty revenues of approximately £1.3 billion would therefore fund the construction of an additional 7,647 affordable homes in the capital every year. In 2012 a total of just 8,380 affordable homes were built across the 33 London boroughs, so the additional revenue would deliver a significant 91% increase in the number of affordable properties being built.
‘With property prices in London rising faster than anywhere else in the country and construction starts at shockingly low levels, there is a desperate need for more affordable homes in the capital,’ said Helen Evans, chief executive officer of Network Housing Group.
‘Londoners account for 13% of the UK population, yet they generated one third of the country's stamp duty revenue last year. While the Treasury will of course be reluctant to relinquish control of this significant income, it is precisely this kind of radical solution that is required to tackle a situation which has been left to deteriorate for far too long,’ she added.
