Government challenged to sort out housing market

Countrywide, the largest property services group in the UK has today launched a report entitled “Addressing Challenges in the UK Housing Market”.

The report urges the government to consider six solutions that it believes will boost the housing market. 

1.       Set minimum and meaningful mortgage lending targets.

2.       Actively address the structure of the UK house building sector and restrictive planning laws.

3.       Align tax receipts from the housing sector with long-term investment and incentives.

4.       Review the outdated thresholds and ‘slab’ mechanism of the SDLT system.                

5.       Seek out measures to reduce house price volatility.

6.       Consult and engage constructively with the UK housing industry.

Countrywide thinks working with the housing industry should be at the top of the government’s agenda, and that helping buyers, tenants and landlords will fuel economic growth in the UK. 

Grenville Turner, Chief Executive of Countrywide, said: “The total tax proceeds foregone due to the current shortage of housing supply and low transaction levels is in excess of £7 billion a year.“ 

According to the Council of Mortgage Lenders, housing purchase lending levels are a third of what they were five years ago. 

Mr Turner added: “More houses at the right price are needed in the right places. 

“By the end of 2012, there will be 400,000 more households in the UK than there has been housing built [1]; however no comprehensive Government plan of action is in place to contend with this.” 

The group believes property tax and investment need to be aligned. The current tax take from stamp duty is almost four times as much as the annual spend on building affordable housing.  

Mr Turner added: “Stamp duty for sub-£250,000 properties should be removed in order to boost housing market activity at a time where higher deposits are required to obtain a mortgage, as only 13% of Stamp Duty comes from properties worth less than £250,000.”  

“House prices must be aligned with wage inflation and deflation, as excessive levels of house price volatility only benefits a small proportion of homeowners and undermines the confidence of lenders.” 

The full report can be seen here

[1] Source: Hamptons International Research.