The Joseph Rowntree Foundation (JRF), a charity that funds UK wide research and development, have called for ‘urgent and fundamental reform’ of the housing market following what they call a ‘failure of policy-makers to learn the lessons from previous boom and bust cycles’. The UK, which has one of the most volatile housing markets in the world, has been subjected to four boom and bust cycles since the 70s with house prices increasing by 250 per cent between 1994 and 2008. These cycles serve to distort housing choices, ultimately drive up arrears and repossession rates and inhibit house building.
The JRF Housing Market Taskforce, convened in 2009, has recommended policy options that would, when put together, help create a more stable housing market, protecting home owners and affording more buyers the ability to get onto the property ladder.
Some of the recommendations include:
– Increased supply of housing
– Reform of Stamp Duty and Council Tax
Whilst supply is key to managing the volatility of house prices the scale of any increase means that this, on its own, will not reduce the volatility in the housing market.
Both Stamp Duty and Council Tax could go some way to helping reduce volatility in the short term and the Taskforce believe that this should be linked to property values.
In the three decades since 1980 some 840,000 households have undergone repossession proceedings as a result of their failure, for whatever reason, to make repayments. With the increased threat of redundancies this figure will ultimately increase, leading the Taskforce to request improvement on the current system of safety nets.
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