London housing associations call for budget reforms to tackle the housing crisis

The G15 calls for fiscal devolution and greater control over housing and public land to invest in the growth social housing could provide.

As it stands, G15 developments have fallen by 66% in the past two years whilst £5m is spent every day to tackle homelessness. At the same time, 210,000 Londoners are living in temporary accommodation.

This fall in development isn’t owed to lack of capacity on G15’s part. Since 2019, they’ve delivered more than 109,000 homes at around 70% affordability, but predictable economic input would unlock a greater housing push.

“The Budget is an opportunity to give London more of the tools it needs. That includes greater control over housing investment and allowing the capital to reinvest some of the revenues its housing market generates in permanent homes rather than continuing to spend billions managing homelessness,” added McDermott.

In 2024/25, London generated £48.8bn more in tax revenues than it received in identifiable public spending. The report estimates that if just 2% of this was reinvested into the city, it could replace the Greater London revenue grant.

G15 suggests that this allocation, plus 25% of Stamp Duty receipts – worth £1.285bn in 2024/25 - would be sufficient to create a London Housing and Homelessness investment fund whilst long term reform of Council tax and Stamp Duty is being developed.

This equates to £3.5m every day for housing and homelessness investment. Findings indicate that just £1 of this public investment could unlock £6 of additional private finance.

Tax forms the pillar of G15’s argument that housing should form part of the economic rationale for a budget reform to provide good growth in every postcode.

As part of the report, Centre for London has modelled an alternative Proportional Property Tax based on current property values. This includes national, borough and Mayoral components that abolish the current cases of lower-value homes paying a much larger share of their value than the most expensive properties.

The suggested model could generate £912m of additional annual revenue in London, the equivalent of 4,100 social rented homes.

G15’s budget submission highlights that this could provide a predictable level of income to support long-term development decisions.

Meanwhile, the research said abolishing Stamp Duty for primary residences could churn up the current housing market – unlocking homes unsuitable for their residents.

The shift would allow older residents to downsize without the upfront tax bill associated with moving homes and unlock around 24,000 three-to-four-bedroom homes annually.

The submission also calls for greater control and transparency around national objectives.

As it stands, London can receive up to £11.7bn of the London Social and Affordable homes Programme. G15 argues that money is a positive but the decisions behind how it’s used is even more important.

They are asking for full devolution to give more freedom over home prioritisation, where funding is targeted and how quickly decisions are made.

They are not expecting Government to allow this without accountability and protection of existing commitments.

“The government has made an important long-term commitment to social and affordable housing. The next step is making sure London has the certainty and flexibility to turn that commitment into homes,” said McDermott.

To look at the wider picture, this objective backs Prime Minister Andy Burnham’s recent decisions to give regions greater powers over major planning decisions.

Freedom over public land was also issued as an opportunity area. The submission asks for public bodies to have greater opportunity to use deferred land payments to minimise the upfront cost of delivering schemes that create long-term value.  

Outside of housing control, the budget recognises that apprenticeships need to align more closely with the investment pipeline to provide worker capable of producing these developments. Greater control over the Growth and Skills Levy would allow this employment support.

The final assertion of the report is to restore the Local Housing Allowance which has been frozen since 2024. In the current state, only 1.2% of privately rented homes are affordable and adding to the permanent housing shortage.

With 86% of Londoners say housing costs influence where they live and 72% having delayed major life decisions because of housing costs, the pressure on London’s housing system is increasing and the consequence on public finances growing.

Find out more Read the full G15 Budget submission or report, A city that works for everyone, which includes analysis, statistics and polling on how social housing supports London’s economy, workforce and communities.