Ten steps to release pressure on housing market

Graham_Devon

Or in other words, stem HPI...

Guardian article which explains the following ten steps in full...

1. Build more homes
2. More garden cities
3. Make changes to stamp duty
4. CGT on all house sales
5. Ban or tax foreign investors
6. Annual property tax
7. Tax landlords moe
8. Restrict mortgage lending
9. Fill empty homes
10. All of the above

Some of the steps above we've discussed before.

It is though, another article suggesting that HPI should be reeled in.

http://www.theguardian.com/business/2014/apr/20/housing-superbubble-ten-steps-release-pressure

moneyinmypocket

I don't understand why we would want it need to do this - isn't HPI good for the country over all?

ukcarper

1. Good idea
2. Good idea
3. Not sure how that would work
4. Bad Idea would make moving almost impossible
5. Only relevant for central London
6. Already have council tax.
7. Not good for tenants .
8. Probably would restrict HPI with the cost of making it very hard for majority of people to buy and condemn them to renting.
9. Would be good if possible but not really practicle.

wymondham

The best one would have been max mortgage 3x your income....!

CLAPTON

build more houses

Masomnia

Building more houses is the only real solution.

I wouldn't have an issue with making primary residences liable to CGT, but in bringing that in you could scrap stamp duty and the need for extra taxes, no landlords tax, and an annual property tax would be avoided.

Restricting mortgage lending would just defeat the object.

CLAPTON

Masomnia wrote: »

Building more houses is the only real solution.

I wouldn't have an issue with making primary residences liable to CGT, but in bringing that in you could scrap stamp duty and the need for extra taxes, no landlords tax, and an annual property tax would be avoided.

Restricting mortgage lending would just defeat the object.

why would cgt on primary residences increase the number of houses built or reduce their price?

Masomnia

CLAPTON wrote: »

why would cgt on primary residences increase the number of houses built or reduce their price?

I don't suppose it would, not directly anyway. I'm not saying it would, as such, just that as a policy I wouldn't be particularly against it.

HAMISH_MCTAVISH

Yeah, I mean, it's nice to see these little Guardianistas come to the party and all, even if it is more than a few years too late, even if it is wholly political as they attack the Tories, and even though the current bout of HPI is not at all unrelated to the fact that they and their ilk were busy spending the decade up to 2008 supporting the Blair and Brown government's crazy lack of action on house building.

And then spending the years since 2008 pointing fingers at all the wrong places for what was happening with the credit crunch and house building and.... Well, you get the idea.

But in this case the journalist has correctly identified the primary cause (shortage of houses) and correctly listed the primary solution at number one on the list (build more houses).

Everything below that is of almost no relevance.

There is only one solution to a housing shortage, and that is to build more houses.

Some of the posters on this board have spent the last 5 years posting until we were blue in the face that we have a massive housing shortage in this country, and any tinkering with restricted lending, etc, was only 'kicking the can' down the road..... that it would prevent people buying, which would prevent builders building, and that it would drive up rents, would enrich landlords, would worsen the housing shortage, and would cause a bigger boom later as a result.

We were absolutely 100% correct on all those points while the usual suspects couldn't even accept a housing shortage existed, let alone the speed and scale to which is was worsening with every additional month of the mortgage rationing they were loudly cheering on at the time.

It's far too late now to try and put the genie back in the bottle.

The next boom was locked in the moment Brown/Darling failed to act early enough to address the credit crunch and allowed mortgage rationing to set in.

And it's inevitable size grew every month for the last 5 years+ that both Darling and Osborne decided to allow mortgage rationing to continue, so worsening the housing shortage from already critical levels while population grew relentlessly.

Ah well..... We did try to warn you.

rageagainstessays

if you want the market to collapse, excellent plan I'll find a window to jump out of...

purch

Hamish is correct

Until the housing stock is increased massively, any other measures are just tinkering.

There is a shortage of housing in areas where demand is strongest, so putting CGT on sales will only increase that shortage.

If we ever get to a position where supply get's closer to demand, then might be the time to consider other measures to ensure that HPI can be controlled, but in all probability when supply does match demand we won't need to, as the market will start to function in the way that it should.