A very interesting editorial piece in this week’s Contract Journal.
In last Thursdays post “VAT on Building it's Not Over Yet” I raised the idea of harmonising VAT at level above 0%. CJ agree:
“It would hardly appear to be good economic sense to build more houses when so much of Britain’s housing stock is lying empty, but could be brought back into use with some upgrading – which would be a lot cheaper under a 5% VAT regime rather than 17.5%.”
They go on to point out that refurbishing empty homes may well be cheaper and more environmentally sustainable than building new:
“London, where there are a whopping 91,000 empty homes. These would require an average of £12,000 spent on each to bring them up to a good standard of repair – much less than building new homes and a far easier, more sustainable way to provide affordable housing.
For a government so concerned with Kyoto and green issues, the fact that it's more cost-effective to demolish and rebuild public buildings such as schools, rather than upgrade them, must surely be at odds with its stated beliefs. And it can hardly be said to be sustainable, despite the fact that the new buildings meet current environmental standards.”
Good point. Of course I should add that returning empty homes to use is never going to be a replacement for building new, but it is surely an important contribution. And it’s good to see the argument being made in CJ.