OXFORDSHIRE’S councils should be able to collect revenue from stamp duty on property purchases and use the proceeds to help solve the county’s housing crisis, according to an independent think tank.

Centre For Cities, a not-for-profit organisation in London that focuses on improving the economies of UK cities, said the change would raise at least £187m a year.

It called for the government to devolve the retention of stamp duty to local authorities, as will occur for business rates.

Cities in the UK “have too few financial incentives to take the often difficult decisions required to boost growth, or innovate to deliver more effective and efficient public services,” said the think tank in its new report, Beyond Business Rates: Incentivising Cities to Grow, which was released on Tuesday.

The study estimates that total revenue from stamp duty in Oxfordshire was £187m in the 2014-15 financial year, £138m of which was generated by residential property sales and the remaining £49m from commercial property transactions.

The report also calculates that if Oxfordshire were to achieve its house building target in the Local Enterprise Partnership (LEP) area between now and 2031, this would generate an additional £707m to £805m – or between £44m and £50m a year – in stamp duty on new build sales alone.

Oxfordshire LEP’s programme aims to build between 93,560 and 106,560 new homes over the next 16 years, or between 5,848 and 6,660 a year, compared to the 1,630 new dwellings completed in the county in the past year, according to the study.

Co-author of the report Louise McGough said the study had focused on Oxfordshire because Oxford is the most expensive city in the UK to buy in.

The average house price in the city is now almost 15 times the average wage.

The report said: “This affects both existing residents’ and potential new residents’ ability to live in the area, which poses a risk to economic growth in the long-term.”

Miss McGough said: “By having control over these [stamp duty] revenues, you’re increasing the incentive to build houses.” The local authority would be able to see stamp duty rise as a result of house building.

While the report’s recommendation is likely to be welcomed by local authorities, there is scepticism about whether a devolution of stamp duty will happen.

Ed Turner, deputy leader of Oxford City Council and board member for finance and corporate asset management, said: “Local government finance is unacceptably centralised in England and it would make a lot of sense for stamp duty to be retained locally. However, I don’t see any likelihood of this happening in future.”

The government will enable local authorities to retain revenue from business rates and spend the money on local government services from 2019-20.