Suggestions for controlling house price rises

caronoel

Most or all of us on here are of the view that rapidly rising house prices are not sustainable in the long run.

My own view is that I would welcome house price rises of a couple of percent above inflation, but that 10%+ rises are not a good thing.

The rises over the past couple of years are meritted because house prices have been flat for many years, but we dont want to encourage another crash like 2008.

A few ideas to control excessive inflation:

1) Stamp Duty at 15% for non-EU resident buyers. Hong Kong has just introduced something similar to reduce the wall of money coming in from mainland China. Seems to taken some of the heat out of the market there, without exacerbating a fall

2) Help to Buy ceiling cut to £300k, and limited to FTBs

3) Lettings Relief for CGT cut to £20k.

Thoughts?

PaulF81

Cap total mortgage lending on an annualised and monthly basis. Lack of lending during the credit crunch constrained prices.

92203

Why above inflation? Why not inline with wage inflation?

caronoel

92203 wrote: »

Why above inflation? Why not inline with wage inflation?

Because, in a healthy market, with repayments inevitably house prices will rise a bit above rises in wages or prices. There should be a couple of percentage points difference, but much more than that would not be sustainable

PasturesNew

Only allow 1 BTL and only if you own your house outright already.... if you want more you have to BUILD them.

Those possessing outside of these rules have to get rid within 10 years.

caronoel

PaulF81 wrote: »

Cap total mortgage lending on an annualised and monthly basis. Lack of lending during the credit crunch constrained prices.

Not sure I agree.

Crude market controls would just drive money into other asset classes.

PasturesNew

caronoel wrote: »

M
1) Stamp Duty at 15% for non-EU resident buyers. Hong Kong has just introduced something similar to reduce the wall of money coming in from mainland China. Seems to taken some of the heat out of the market there, without exacerbating a fall

I think I read somewhere that by some magical stealth, offshore company ownership etc etc .... many rich bugg4hs actually pay NO stamp duty. Something to do with how/where an asset is held..... yes, asset, it stopped being a home somewhere along the line and became a tradeable item ...

caronoel

PasturesNew wrote: »

I think I read somewhere that by some magical stealth, offshore company ownership etc etc .... many rich bugg4hs actually pay NO stamp duty.

Thank you for your articulate and well argued contribution.

Would agree that a temporary imposition of 15% stamp duty for corporate and non-EU purchasers would be welcome.

caronoel

PasturesNew wrote: »

Only allow 1 BTL and only if you own your house outright already.... if you want more you have to BUILD them.

Those possessing outside of these rules have to get rid within 10 years.

Such a policy would dramatically reduce the amount of rental stock available, thereby pushing up rents.

PasturesNew

caronoel wrote: »

Such a policy would dramatically reduce the amount of rental stock available, thereby pushing up rents.

And increasing houses available to be bought - many would-be buyers are finding it hard to buy a house as BTLers are "snapping" them up, with EAs often seeing a BTL sale as a more assured sale (commission).

The number of houses does not change, so no less people go without a bed for the night.... only the balance of opportunity and ownership changes.... and HPI is built on more sane foundations.

kabayiri

I think you need regional policy.


The house price inflation issue is really pressing home only in London, and possibly other pockets in the S.E. Things are far more balanced up here in the NW, for example.