In response Countrywide has set out six ways to help the government get its house in order to support property and mortgage market recovery.
The plan is as follows:
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 Review the outdated thresholds and ‘slab’ mechanism of the SDLT system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
Grenville Turner, chief executive of Countrywide, said: “We are asking government to take decisive action to get our nation’s housing market in order and help home buyers and tenants by enabling developers, investors, homeowners and landlords, thereby fuelling economic growth in the UK.
“A healthy housing sector is crucial to the UK economy and working with the housing industry needs to be at the forefront of government’s agenda.”
Turner highlighted that the total tax proceeds lost due to the current shortage of housing supply and low transaction levels is now in excess of £7bn a year.
He said: “More appropriate credit is urgently required in the housing market, but lending volumes for house purchases are only one third of what they were five years ago.
“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; however no comprehensive government plan of action is in place to contend with this.”
Turner said property taxes and investment in UK Housing plc need to be aligned.
The current tax take from Stamp Duty is almost four times as much as the annual spend by the Homes and Communities Agency on building affordable housing.
He argued that 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.
And he added: “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.”
