“James Ashton’s article in the Evening Standard (4th December) on the new progressive stamp duty system attempts to lay down some of the pitfalls of a higher revenue on top end properties, but I’m not sure that even he believes in the counter argument that he is making. Clearly it’s fairer; I’m not sure many people are going to be lamenting a slowdown in the profits being made by estate agents in the £10m plus housing market.
The key is what happens to the money. Because London doesn’t need it – certainly when compared to the rest of the country. If London will generate 55% of national stamp duty, that is probably reflective of the unhealthy imbalance London has on the economic wellbeing of the UK. That money should be ring-fenced for investment in other areas, both to encourage investment elsewhere, and to take the heat out of the Green-Belt strangled city we live in. No one is going to sanction a mass building programme around the M25, so we need an alternative plan.
To put this into perspective, it’s currently possible to buy a one bedroom flat in arguably the nicest part of Birmingham (St Paul’s Square, within the Jewellery Quarter) for £120,000. 10 years ago it was worth £115,000. Londoners wouldn’t be surprised to witness that kind of capital growth in one month. It cannot be sustainable to have such disparity between our first and second cities. Unless we are happy to call them first and second class economies.”