Estate agency warns building homes in London ‘no longer viable’

The Capital's position as one of the best cities in the world to build property is 'under threat' unless the Chancellor lowers taxes, agency and developers agree.

andy jones

Developers and investors in London warn that the Capital’s place as a No1 global city is under threat unless Chancellor Jeremy Hunt lowers taxes.

Speaking ahead of today’s Budget, senior managers at Leaders Romans Group echo complaints at last week’s London Resi Conference that building in London is no longer viable.

Andy Jones, director of corporate and Buy to Rent at LRG (main picture), says: “It’s rare to hear panel speakers swearing at a London property conference, but last week’s London Residential Investment conference was somewhat fruity!

“There was frustration in the room that clearly highlighted a willingness by investors and developers to get on and build, but as things stand this was just not viable.

It was inevitable that the central question – ‘Is London still considered the No.1 global city?’ created some consternation.”

Costs up by third

Some developers said their costs had increased by nearly a third, meaning schemes were being cancelled or remodelled as a result.

“The consensus was that debt financing costs are prohibitive, costs are out of control, stamp duty is too high, Capital Gains Tax for international buyers is excessive, and increased mortgage rates and an absence of mortgage interest tax relief is putting off the retention and flow of BTL landlords, in the sector,” Jones says.

Kevin Shaw, Managing Director National Sales, LRG

Kevin Shaw, managing director national sales at LRG, says: “We must address the punitive level of stamp duty – particularly stamp duty over £500K which is holding back mobility in the housing market and affecting downsizers.”

Jeremy Leaf

Jeremy Leaf, north London estate agent, agrees: “More needs to be done to encourage buy-to-let landlords to stay invested and reduce the number who are leaving the sector.

“Perhaps this could be achieved by re-introducing mortgage interest tax relief and re-adjusting stamp duty thresholds to coincide with the Rental Reform Bill becoming law.”


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