(from a VAT tax consultant:)
‘VAT is charged by default is charged at 20% – but the 5% rate is applicable under certain (very specific) circumstances
1. The supply and fit of eligible Energy Saving Materials
2. The renovation of premises unoccupied for more than 2 years
3. Changing the number of individual dwellings in a property.
That said, where VAT is charged, may Local Authorities operate special rules that allow them to reclaim the VAT back from Treasury.’
As you are probably aware, new-build housing is VAT exempt. 20% is a huge weighting against maintaining the existing stock. Lambeth ought to come clean on this bias. The question how Lambeth intend to fund redevelopment still hangs. Central government, subject to pressure from the powerful construction lobby, see new-build as a means to kick-start the economy and produce lots of jobs. The fact that by constantly demolishing & pushing to land-fill is wasting embodied energy, is entirely peripheral to their concerns.