Countrywide EA's suggest minimum lending targets, price control and stamp duty axe

Graham_Devon

Countrywide, elsewhere in its 'addressing challenges in the UK housing market' report, says that other things can be done to help boost the market.

This includes setting 'minimum and meaningful mortgage lending targets' and 'seeking out measures to reduce house price volatility.'

Grenville added: '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.

'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.'

Other changes Countrywide mutes in its report include actively addressing the structure of the house building sector and restrictive planning laws, consulting constructively with the housing industry and aligning tax receipts from the housing sector with long-term investment and incentives.

The report said: ''There is a lot of debate regarding the extent of the housing shortage in the UK. However, everyone appears to agree that there are not enough houses in the right places, or the right type of houses at the right price - in other words there is a shortage.'

I agree with an estate agent!!

I'm not sure how targetted lending could really work, but if prices were aligned with inflation and wages, I really can't see an issue with people borrowing, as it would be sustainable. (in the sense that people are not borrowing far too much).

Stamp duty I don't really care for, but the money would have to be made up elsewhere I guess.

I believe the abve proposals are one of the few which I have seen that would really work. It combines sensible lending to more people, a control on prices, and more control over builders actually building for demand. They are not just saying "build more houses", but specifically state "more houses at the right price".

HOW it would be achieved though, I have no idea!! But I do like it. Common sense....and from an EA!!

michaels

The level of economic illiteracy in this country never ceases to astound me.

wotsthat

Graham_Devon wrote: »

HOW it would be achieved though, I have no idea!! But I do like it. Common sense....and from an EA!!

You're doing better than me - I don't what they're trying to achieve let alone how they're going to do it.

http://www.countrywide.co.uk/media/press-release.aspx?id=e7f4c40e-9525-44b1-90a5-70bd4eeb93de

grizzly1911

One thing that would help oil the wheels is to graduate the way in which Stamp Duty is levied rather than applying increase to the whole of the purchase price.

£7.5K on a 2500001 house v £2.5K on a £250000 house is nuts IMO. It distorts the prices.

There is no reason it couldn't be gradually brought in at the bottom end either.

I think blanket relaxation is a bad idea too. Certainly more flexible regulations in hot spots would help. Our local authority don't have a local plan at present. They are being inundated by speculative requests for large scale development, on green belt, where there is no local need and little increase in local employment anytime soon.

Graham_Devon

michaels wrote: »

The level of economic illiteracy in this country never ceases to astound me.

Can you explain why, rather than just throwing an abusive sentence at me?

ILW

How would they control house prices?

CLAPTON

'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.'

just love that bit

so in times of low prices the government will force buyers to pay more than the asking price

and in times of high prices the governemnt will force sellers to lower their price.

or maybe the government could intervene in bad times and stock pile houses which they then sell in times of good times



lunacy

Graham_Devon

CLAPTON wrote: »

just love that bit

so in times of low prices the government will force buyers to pay more than the asking price

and in times of high prices the governemnt will force sellers to lower their price.

or maybe the government could intervene in bad times and stock pile houses which they then sell in times of good times



lunacy

No no no.

The countrywide report suggests that incentives to boost demand, as we are seeing all around us at the moment can lead to asset price bubbles as they are not matched by increases in supply.

Therefore, you can control prices somewhat by either reducing the incentives to buy, or increasing the supply to match the incentives.

Therefore, prices are not artificially increased by artificial demand, i.e. demand created through incentives.

As for the wages bit, it's easy to control prices vs wages. A simple multiplier lid on mortgages. It also talks about rent....it's a housing report, not just a house buying report. It's fairly easy to implement local price caps on rents and increases.

shortchanged_2

Grenville added: 'We are asking Government to take decisive action to get our nation’s housing market in order and help home buyers, tenants and struggling Estate Agents by enabling developers, investors, homeowners and landlords, thereby fuelling economic growth in the UK.

I've added the bit that Grenville 'accidentally' left out.

CLAPTON

Graham_Devon wrote: »

No no no.

The countrywide report suggests that incentives to boost demand, as we are seeing all around us at the moment can lead to asset price bubbles as they are not matched by increases in supply.

Therefore, you can control prices somewhat by either reducing the incentives to buy, or increasing the supply to match the incentives.

Therefore, prices are not artificially increased by artificial demand, i.e. demand created through incentives.

As for the wages bit, it's easy to control prices vs wages. A simple multiplier lid on mortgages. It also talks about rent....it's a housing report, not just a house buying report. It's fairly easy to implement local price caps on rents and increases.

it's dificult to see there are many incentives to buy at the moment unless you mean cheap interest rates and QE;

the major issue is that when there was a house price bubble why was there not a corresponding boom in supply?


whilst it is very easy to introduce rent controls, sadly the unintended consequences have always been a disaster

Graham_Devon

CLAPTON wrote: »

it's dificult to see there are many incentives to buy at the moment unless you mean cheap interest rates and QE;

Newbuy. (That's £1bn of taxpayer money directly pumped into the housing market btw).

Lend a hand.

Stamp duty holidays.

£80bn worth of money created to channel into mortgage and small business lending at lower rates.

Shared equity.

And that doesn't even cover the props to existing homeowners, such as forebearance (5-8% of the market is under forebearance) and SMI.