Angela Rayner has kept the door ajar for a new property tax which would land London with an additional £7.5 billion bill.
Council tax reform considered
The Housing Secretary highlighted criticism of the current council tax system and said any replacement would be a matter for the Budget, expected in the autumn. Andy Burnham has previously backed a proportional property tax advocated by the Fairer Share campaign.
The new levy, which would replace council tax and stamp duty, would be based on 0.48% of the value of a property. It would double to 0.96% for second homes, empty properties and those owned by foreign nationals.
Impact on London households
The landmark reform would see the capital’s tax property bill increase by an estimated £7.5 billion. A majority of London households in more than 20 boroughs would end up paying more, according to an analysis. London experts say people who own a £600,000 home in the capital could see their property tax bill go up by £800.
Asked if the Government was looking at reforming property taxation, Ms Rayner told BBC Breakfast: “Well, I think at the moment people feel that it's the early 90s when council tax was last looked at. It's something that I know is topical at the moment.” She signalled that the issue would be looked at ahead of the Budget.
Rent controls ruled out
Ms Rayner also ruled out rent controls despite Mr Burnham having said just days ago that a rent freeze was one of the issues which the Government would consider as part of its measures to ease the cost of living. She said: “That is not something that we’re looking to do because we’ve seen what’s happened in areas like Scotland. It hasn’t necessarily brought rents down.”
She argued that the experience of rent controls in Scotland had led to them being used as a “floor” rather than a “ceiling” for letting levels. She stressed that changes made through renters’ rights legislation brought in under Labour so far are “already having a significant impact on the market”.
However, her stance on rent controls was immediately criticised by Green Party leader Zack Polanski and former Labour leader Jeremy Corbyn, MP for Islington North. Mr Polanski posted on X: “This is the one single measure that would help the most and save £billions. All talk. Continuity Starmer.” Mr Corbyn added: “There is no hope of ending homelessness if we do not stand up to vested interests and take action against extortionate private rents. We need rent controls, and we need them now.”
Mayor of London Sir Sadiq Khan was among those who voiced support for rent controls alongside Mr Burnham in 2023. Sir Sadiq also hit back on Friday against Manchester chiefs who claimed they were building more homes in the northern city than were being delivered in London. Ms Rayner admitted that the Government may struggle to meet its goal to build 1.5 million new homes by 2029.
