Exemption of institutional investors from 10% stamp duty when rental to state under long term lease.
With shadow cost of funding currently at 130% to the state it makes sense not to charge the 10% stamp duty when the units are going to be rented on to the state.
This situation has existed in PPP projects for some time now where the state is charged a mark up on a number of taxes.
They take with one hand and give back with another - eliminating the charge lowers the overall funding cost to the state of the transaction as the above example shows.
Construction materials costs are increasing - how will the increases impact on delivery costs of housing?
With housing demand continuing to increase supply will take a while more to catch up with demand. Significant year on year growth in output is required to eliminate the supply deficit by 2026.
As apartment all in delivery costs are high many schemes would not be started in the absence of institutional funders and purchasers
Lots of discussion over the past week on whether #apartments should have been included in new planning permission conditions & owner occupier guarantee.
The all in cost of apartments is higher than an equivalent sized house and there are a lower number of purchasers that can afford an apartment.
Institutional investment has a role to play in supporting new supply, particularly in delivering high density apartments that would otherwise not be built.
Delivering houses and apartments by the State at a lower cost will require an amount of subsidy in addition to efficient procurement & delivery - there will also be a significant lead in time to delivery of the homes.
There is no doubt that a mix of #publicsector and #privatesector delivery of homes is going to be required to target delivery of 35,000 homes per year. There are a number of sequential steps and approvals that ensure public delivery gets value for the State's money and that the #procurement is open to as wide a range of providers as possible. The reality is that starting with site ownership and with a very efficient process it takes time - the public supply tap cannot be turned on and houses provided tomorrow. How the State provides homes in the interim period will require a number of approaches including #procurement of homes through lease and purchase from the market. A situation where local authorities, AHBs and other agencies are bidding against each other or individually negotiating and driving up prices does not get good value - this needs to be thought through.
A more detailed analysis of the comparison between the public and private approach is given in this post - www.keoconsult.com/knowledge/housing-procurement-delays-key-is-the-duration-of-the-project-governance-process-not-the-procurement-process
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