Research from proprtyfinder.com has found this public misunderstanding is widespread, with property investors and immigrants cited as the main culprits for the current lack of affordability in the housing market.
However the real villain in this story, stable low interest rates and inflation, came bottom of the poll with just 6.3 per cent. Twice as many people blame central government for housing supply shortage as blame local councils, yet it is usually local town halls that block residential development.
Warren Bright, chief executive of propertyfinder.com said: “10 years of low interest rates have brought about Britain’s high house prices, but this is poorly understood by most people. Restrictive planning policy enthusiastically enforced by local councils has severely constrained the ability of developers to provide the number of homes needed by Britain’s rising number of households, and has exacerbated the rise in property values.
"Immigrants and property investors make high profile scapegoats but are simply too small in number to be responsible. The drift to the South by the UK’s own population has pushed prices up faster there than elsewhere in the country, but that is nothing to do with immigrants and does not affect overall national average prices. In any case, the house price boom predates the recent big wave of immigrants.”
The vast majority (91 per cent) of respondents expected the government to take action. Astonishingly, one fifth (20.5 per cent) of respondents wanted the government to restrict immigration as a way of controlling house prices, while 18 per cent wanted MIRAS (mortgage interest tax relief) to be reintroduced. Another 15 per cent wanted more tax to be imposed on property investors.
There was little appetite for increased housing supply – just over a tenth want the government to compel local authorities to allow more building.
Bright continued: “The strength of appetite for government interference is quite startling, and the proposed remedies are pretty extraordinary. Immigration controls are not going to make any significant difference to house prices. The reintroduction of MIRAS, would no doubt be welcomed by anyone with a mortgage, but it would only fuel the market further – a cursory glance at the dog days of Nigel Lawson’s tenure at the Treasury will confirm that.
"The housing market is already showing signs of cooling naturally. Whitehall’s role should not extend beyond ensuring the smooth running of a free market.
"With the likelihood of a further base rate rise receding, existing borrowers whose mortgages are linked to base rates (and of course for those on fixed rates who don’t need to refinance), mortgage costs will not rise. That’s very good for stability in the market. We won’t see forced sellers so there is no reason to fear a sharp downturn. Higher base rates should now come off the agenda.”
