Scrapping council tax and stamp duty could help fix London’s housing crisis, a think tank has suggested.
The Centre for London said replacing the two with an annual property wealth tax could help renters to save and encourage downsizing.
A report by the group argued the tax could fund more than 100,000 affordable homes over the next ten years.
The think tank previously found that average floor space per person in the capital had risen by 30 per cent in the last two decades, but that this trend was dominated by high-income Londoners, with very little going to private renters.
Meanwhile, the bottom 40 per cent of households by income have only seen a 6 per cent rise in floorspace.
Many young professionals are now paying more than £1,000 a month to rent a room in a shared house or flat, with many less well off people seeing an even bigger share of their take-home pay eaten up by rent.
The proposed proportional property tax would be calculated as a percentage of the value of a home. Properties worth up to £800,000 would have an average base rate of 0.39 per cent.
The previous report highlighted how average house prices have risen from around seven times median earnings in 2002 to 12 times median earnings in 2024, nearly doubling over two decades.
With far bigger mortgages needed, the capital’s housing tenure mix has changed, with the proportion of London households who are owner occupiers falling from 57 per cent in 1991 to 47 per cent in 2021.
Over the same period, private renter households increased from 14 per cent to 30 per cent.
There were more than 75,000 households living in temporary accommodation in London, as of last autumn, of which 50,000 were with children.
Around 13,000 people were sleeping rough in London between April 2024 and March 2025, a ten per cent year-on-year rise and the highest number recorded, according to the report.
It added that there were 340,000 people waiting for social housing and 2.36 million in “after housing costs” poverty.
Rob Anderson, the Centre for London’s director of research, said: “By every metric that matters, the housing crisis is at its worst.
“It is widely acknowledged by economists and politicians from different parties that stamp duty has a disruptive effect on the housing market and both stamp duty and council tax act as an incentive to hold on to property.
“Removing stamp duty on ordinary movers would release an extra 79,000 homes a year, while raising funds for investment into social and affordable housing.”
