fredag 8 februari 2008

Brockley Boom


16 October 2007 (1), originally uploaded by Cle0patra.

A recent article in the FT's property section (Bringing the suburbs closer - 3 February) had a feature on how the East London Line Extension will boost property prices in its wake. Places like Brockley, traditionally an area where land values were low because of its poor public transport access, were tipped as the next likely places to boom.

Elsewhere in the paper, (Life and Arts - Seaside Saga), was an article on the regeneration of Folkestone, which referred to the expected impact of the new high speed line, and there was a comparison with Margate, which will lose out because the new fast trains will not be stopping there.

The East London Line is part of Transport for London's £10 billion investment programme. But further planned extensions have been put on ice as the Treasury has not given the go-ahead.

Isn't there something wrong here? This is public money which is ending up in a lottery which leaves some property owners with big windfall gains and others with nothing, whilst those who do not own property then have to face higher rents and purchase prices. A little bit of these gains trickles back to the Exchequer but slowly and haphazardly.

It is consequently unsurprising that there is a reluctance to release public funds for further, much needed, transport infrastructure.

It has been suggested that a levy be imposed to capture some of this windfall gain, but one-off hits on market selling prices would be arbitrary and difficult to assess. It is impossible to establish a firm and reliable boundary to the areas that benefit, as these "shade-off" gradually. It would also create hardship for people to be suddenly faced with tax bills which might run to tens of thousands of pounds.

A fundamental principle is being ignored. All land value arises from the presence and actions of the community. If existing property and other taxes were to be replaced by a tax on the annual rental values of the underlying sites, based on existing land uses or agreed consents, then increases in value resulting from infrastructure developments would automatically be picked up.

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Cardinal Cormac Murphy O'Connor

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