Calls Grow to Scrap Stamp Duty and Council Tax as New Report Warns London Housing Crisis at ‘Breaking Point’
A major new report has called for the abolition of stamp duty and council tax in London, proposing a radical new property wealth tax designed to tackle the capital’s worsening housing crisis, unlock homes and fund thousands of new social and affordable properties.
The proposals, published by Centre for London, argue that replacing the current property tax system with an annual proportional property tax (PPT) could help free up larger homes, support first-time buyers and generate significant investment for affordable housing across the capital.
The report paints a stark picture of London’s housing market, warning that rising house prices, widening housing inequality and record levels of temporary accommodation are placing growing pressure on communities, businesses and local services.
Researchers found that while Londoners now have more residential space available per person than two decades ago, the benefits have been heavily concentrated among wealthier homeowners.
According to the findings, households within the highest income brackets have seen substantial increases in living space since 2004, while lower-income households have experienced only marginal improvements, highlighting deepening inequality within the capital’s housing system.
The report also revealed the scale of London’s affordability crisis, with average house prices now sitting at approximately 12 times average earnings — a dramatic rise from the early 2000s.
Meanwhile, homelessness and temporary accommodation costs continue to soar, with London boroughs collectively spending millions each day supporting vulnerable households facing housing insecurity.
Housing affordability pressures are also increasingly impacting economic growth, with businesses warning that high living costs are making it harder to attract talent, recruit staff and retain workers in the capital.
Under the proposed reforms, both stamp duty and council tax would be replaced by a new annual property wealth levy based on the value of a home.
Supporters of the model argue the changes could encourage downsizing, increase housing mobility and reduce the financial barriers preventing first-time buyers from entering the market.
The proposed system would apply higher rates to the most valuable homes, while many ordinary homeowners and renters could see substantial long-term savings.
The thinktank estimates the reforms could help fund more than 100,000 new social and affordable homes over the next decade, while also removing council tax costs for renters entirely.
For many renters, the removal of council tax could significantly improve their ability to save for a housing deposit amid rising rents and cost-of-living pressures.
The report also claims abolishing stamp duty for owner-occupiers could release tens of thousands of additional homes onto the market each year by encouraging more people to move property when needed.
Rob Anderson said the capital’s housing crisis had reached unprecedented levels and warned that simply increasing housebuilding targets would not solve the deeper structural problems within London’s housing system.
He argued that the current property tax structure discourages movement within the housing market and contributes to inefficient use of housing stock across the capital.
The proposals add to growing national debate around housing reform, affordability and property taxation, as policymakers, developers and housing organisations continue searching for long-term solutions to the UK housing crisis.
