Countrywide calls for the Government to act now to boost the property market

Countrywide

Thursday, March 15, 2012

·         Introduce mortgage relief at source for first- time buyers

·         Set UK banks mortgage lending targets

·         Tax breaks for the private rental sector

·        Incentives for development projects

 

Grenville Turner, Group Chief Executive of Countrywide, the UK's largest property services Group,puts the case forward for realistic measuresthat can increase the activity in the housing market:

"A recovery of the housing market is fundamental to economic recovery. According to Government figures, even in its current crisis state, housing supply accounted for around 3% of UK GDP and provides between 1 and 1.25 million jobs in theUK. Furthermore, it is estimated that twice the number of jobs are created in the supply chain, e.g. service jobs and retail income. The potential economic benefits in a stronger housing market demonstrate the importance of implementing practical solutions now.

Current transaction volumes are simply not sustainable. Based on current levels of activity, the average home owner moves house once every 25 years as opposed to once in every 12 years[1] which has wider implications for society, the labour market, and the UK economy.The valuable economic contribution that the property market makes is being overlooked and there is a risk that current Government policy will be ineffective or, even worse, cause unnecessary volatility.

Some of the critical factors hindering theUKhousing market are mortgage accessibility, availability of quality housing stock and lack of investment in the buy-to-let sector to meet the needs of the growing private rental sector. Whilst the Government has introduced some measures to increase activity in the housing market, they must have a clear strategy to achieve a balance of demand and supply through tax relief and incentives with the aim being to reduce volatility in the house market."

Tax relief for first-time buyers

 

Set mortgage lending targets

 

Incentives for landlords to invest in the lettings market

 

Incentives for development projects

[1]  Based on 2002 transactions levels of circa 1.2 million

[2]Halifax House Price Index Feb 2012

[3]  Miras is not a new concept. It was introduced in the 1980's for cohabiting buyers and propelled a new generation into home ownership. However, MIRAS was abolished in April 2000 by Gordon Brown.

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